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Investors will get their first real look at the fortunes and forecasts of two bellwether PC companies Wednesday, as





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release their quarterly results.

Compaq has already

raised its estimate for the recently completed quarter, but Apple hasn't offered a projection. Wall Street will be interested in what the companies say about the their latest quarters, but more important will be what Compaq and Apple provide about 2002. Anything the companies might say about demand or pricing power will provide analysts and investors with clues for what to expect from the rest of the sector, and to a degree, the overall universe of technology outfits.

In that regard, tech watchers will have another full day to digest the prospects for the new year. Along with the two computer makers,

Advanced Micro Devices

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are all scheduled to report.

Apple should post first-quarter earnings of 11 cents a share on revenue of $1.42 billion, according to Thomson Financial/ First Call. In the same period a year ago, the company lost 73 cents a share.

"It should be a ho-hum quarter," said Brett Miller, an analyst at A.G. Edwards. Miller said Apple's results may have been hurt to some extent by the delay of certain products like the redesigned iMac, which will ship at the end of January.

Merrill Lynch analyst Steven Fortuna said revenue could be light because of the company's current product transition. He also believes that Apple missed out on a golden opportunity by not launching the new iMac before the Christmas holidays. PC demand was stronger than expected in the fourth quarter, with U.S. retail sales up 30% from the third quarter, compared with a typical 15% to 20% increase. But Fortuna said much of the strength was focused on less expensive systems. Sales were also weaker compared with the same period a year ago.

Analysts expect Apple to earn 48 cents in 2002, although some believe the company's high cost structure could impede earnings in the first half of the year. The stock trades at 44 times the projected earnings for the full year.

"2002 will be another bloody year for PC stocks," Miller predicted. "On a unit basis, we're looking for single-digit gains, and revenues should be flat to down."

As for Compaq, the company said last week that it would surpass Wall Street's estimates for the fourth quarter. The company now expects to report a profit for the quarter rather than a loss, and estimated that revenue would exceed $8 billion, up from previous forecasts of $7.6 billion to $7.8 billion. At the time, analysts were expecting the company to lose 3 cents a share for the quarter.

Compaq didn't provide an earnings estimate, but the consensus figures carried by Thomson Financial/First Call are a loss of a penny a share and revenue of $7.8 billion.

While analysts say Compaq's consumer business has experienced near-normal seasonality this quarter, they add that corporate demand, which makes up a greater proportion of revenue, hasn't improved.

"There has been little uptick in commercial PC demand this quarter, with most companies spending money on software and services instead," Miller said.

Lingering uncertainty over whether Compaq will complete its merger with



and seasonal weakness in the first half of the year are also reasons to be careful with the stock, analysts say.

Compaq is expected to earn 20 cents a share in 2002. The stock, which is up 44% since Sept. 21, trades at 156 times next year's projected earnings.

Coupled with Tuesday's earnings reports from the likes of


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, investors should be in a position by the end of the day to start determining whether they're too optimistic for 2002, or not optimistic enough.