Netbooks Aren’t Enough: Barclays Cuts Ests On HP, Dell

Citing deteriorating spending by both corporations and consumers heading into year-end, Barclays Research hardware analyst Ben Reitzes today cut EPS and revenue estimates for both Dell (DELL) and Hewlett-Packard (HPQ) . For 2009, he now sees overall PC unit growth of 2%, down from 7%, or a 4% decline ex-netbooks. He sees ASPs down 6% next year, including a 2% hit to desktops and 11% on notebooks. He sees desktop units down 7%, versus 2% previously. The one bright spot: he now sees sales of 40 million netbooks, up from 23 million previously. The rise of netbooks - cheap, low-end notebooks - boosts units, but degrades ASPs and margins. For Dell , Reitzes maintains an Equal Weight rating, while cutting his price target to $13, from $15. For the January 2009 fiscal year, he now sees profits of $1.30 a share, down from $1.37. For FY 2010, he goes to $1.18, from $1.38. He now sees revenues growing 5% in fiscal 2009, then shrinking 1% in 2010. He says that checks “point toward ... (link)