Possibly some potential insight (CPQ +/- ??) from a Major Investment Firm's Research Report/Call this morning:
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STORAGETEK PRE-ANNOUNCES AGAIN.
StorageTek pre-announced a shortfall for the September quarter due to three primary issues:
1) component shortages,
2) ongoing sales-force related issues, and
3) StorageTek-initiated inventory workdown at the OEM level.
It is likely that the first two of these problems will continue into the December quarter, with sales-force issues moving into 2001 as well. Some of the revenue miss will be offset by slightly better gross margin. We are reducing our revenue and earnings forecast as follows:
--For Q3, we are moving our revenue forecast from $560 million to $475 million, with our new earnings number at $0.03 (previously $0.16).
--For 2000, we are moving our revenue estimate to $2.062 billion (previously $2.194 billion) and earnings to $0.20 (previously $0.42).
*THE SALES FORCE ISSUE IS THE MOST TROUBLING. Here we think that StorageTek is facing a couple of difficult challenges. For one thing, we doubt that it has been able to reach stability within its existing sales force and sales management, as individuals continue to come and go. For another, we gather that StorageTek continues to face difficulties in hiring the required number of salespeople and this issue is not likely to change soon.
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Hopefully, CPQ has made significant progress in overcoming past similar problems and is on its way towards GROWING revenues & profits in this HUGE marketplace !
Michael |
