Investors spooked by an earnings warning from
( HWP) and
( CPQ) the business in early trading Wednesday.
SCI, which makes electronics components, PCs and set-top boxes on contract for a wide range of customers, said that it expects to miss the earnings expectations for its first quarter, ending Sept. 30, because of weak demand for consumer electronics and PCs. The company said it expects to earn 34 cents a share, below the
First Call/Thomson Financial
consensus of 38 cents a share.
SCI wouldn't specify which customers weren't buying as much. But its two largest, H-P and Compaq, were solidly lower on heavy volume. H-P was off $3.88, or 3.5%, to $107.13 on 2.9 million shares, while Compaq was down 94 cents, or 2.9%, to $30.56 on 12.9 million shares.
The rest of the PC sector was escaping the selling. The
Philadelphia Computer Boxmaker Index
was down just 0.34%.
Investors will have to weigh Wednesday's news against recent accounts of a sharp rebound in demand last month. The latest
, a survey of electronics stores published by market research firm
Allison Boswell Consulting
, describes a 60% increase in PC unit shipments in August from July. But it doesn't help that SCI's warning comes one day after contract manufacturer
( SLR) spoke of rather tepid future PC demand in its earnings conference call.