Computer group Gateway's shares plunged 18 per cent in early trade on Wall Street today after warning of lower sales ahead and a brokerage house downgrade of the stock.
In the first 20 minutes after opening, Gateway shares plummeted 1.85 dollars, or 18.05 per cent, to 8.40 dollars.
Gateway said a day earlier it expected revenue would total a weaker-than-forecast $1.16 billion in the October-December quarter of last year.
Consensus forecasts on the market were for sales of $1.39 billion in the quarter, according to finance research group Thomson Financial/First Call.
Part of the stock price drop could be attributed to brokers at USB Warburg, which downgraded the shares from a "buy" to a "hold" rating. Warburg analysts said they doubted the company's ability to compete in tougher computer markets.
The computer maker has been particularly hard hit by the slowdown in computer buying, which has also hurt sales of computer chips.
A chip industry association said last month it expects chip sales for 2001 to be the worst in the industry's history.
Gateway, which announced last year it was exiting from most of its European markets and laying off international and US employees, will release its fourth-quarter results on January 24th.