Q2: It's Ugly All Over

Electronic News, July 2, 2001 by Heidi Elliott

How many ways are there to say "bad"?

Pick an adjective-awful, harsh, terrible, dire, horrific, ghastly, dreadful-and apply it to the outlook for the second-quarter financial results. Analysts have weighed in with their expectations for the June quarter, which closed last week, and for the most part, there's very little good news here. The electronics industry is keeping its head down, hoping to ride out the latest economic downturn--now projected to last through the end of this year. The consensus expectation is for grim reporting all around--both sequentially and year-over-year-when financial results become public over the course of the coming weeks. And if misery loves company, the electronics industry has it bad.

San Jose-based Gartner Dataquest believes the electronics industry is in for a slew of bad news-for PCs, cellular and semiconductors, to name a few. The analysis company forecasts a very depressing quarter, but does see some bright spots. (See "Equipment Industry Does a 180," page 15.)

Distribution is also suffering significantly, with recent warnings that revenues could spiral down as much as 30 percent sequentially in what one chief executive officer describes as the worst downturn he's seen in three decades. (See "From Bad to Worse," page 16.)

Connector makers too have a long road to recovery ahead of them, with no new orders from the telecommunications segment and softness in PCs and data communications.