Marshall Industries Expects Drop in 4th-Quarter Earnings

Marshall Industries, the No. 4 U.S. distributor of electronic components and production supplies, said Tuesday that it sees lower-than-expected earnings for its fiscal fourth quarter because of stiff price competition for its products.

The El Monte-based company expects net income for the period ended May 31 to be between 38 cents and 41 cents a diluted share, compared with 70 cents in the year-earlier period.

The predicted results fall short of the 50 cents a share expected by four analysts polled by First Call Corp.

The company, whose customers include Texas Instruments Inc. and NEC Corp., said results will be hurt by an industrywide slump in customer demand and pressures on pricing and margins, especially in the latter part of the quarter.

The warning is “not surprising given the current pricing situation, which is creating havoc in the industry,” said analyst Bob Arnett of Hoefer & Arnett. “Marshall’s unit volume is up. . . . Even in a worst-case scenario like this, the numbers are still good.”

Marshall said its fourth-quarter sales rose to $417 million from $325 million in the year-ago period.

The company’s shares rose 38 cents to close at $29 in New York Stock Exchange trading.

Marshall is the latest in a raft of semiconductor-related companies to be dragged down by slowing orders caused by weak demand for personal computers.

It also said it expects net income, before a gain, for fiscal 1998 to be $1.97 to $2 a diluted share, lower than analysts’ estimates of $2.09. It earned $2.33 a share in fiscal 1997.