Compaq Saw 'Robust' PC Sales Over Thanksgiving Weekend
A WSJ.com News Roundup
Compaq Computer Corp. Chairman and Chief Executive Michael Capellas said the personal-computer maker saw "robust" sales of PCs over the critical Thanksgiving weekend and its fourth quarter is on track with Street expectations.
Mr. Capellas's comments were aimed at soothing rattled investors who took flight from PC stocks this week after rival Gateway Inc. issued a profit warning and an industry research group indicated that PC sales slumped in October and November as consumers spent money on other electronic gadgets.
Compaq shares were up $2, or 9%, at $23.50 in afternoon trading on the Nasdaq Stock Market.
"We did see pretty robust sales over Thanksgiving," Mr. Capellas said Friday at the Credit Suisse First Boston Technology Conference. "So for all those people who ask, 'How was your Thanksgiving?' it was just fine, thank you."
Mr. Capellas said that Compaq's fourth-quarter inventory levels are fine. "So far, demand is on target. There is no change in guidance from us. We're on target for what we said we were going to do."
Compaq, Houston, is the world's biggest seller of PCs. The company's stock was hit earlier in the week after Salomon Smith Barney analyst Richard Gardner said Tuesday that the computer maker has higher-than-normal inventories. In response, Compaq issued a brief statement, as it has done in recent quarters, saying that it is comfortable with channel-inventory levels.
A day later, Gateway, San Diego, lowered its fourth-quarter earnings projections, saying its consumer sales around the globe have slowed sharply and suddenly.
Gateway executives said the slowdown wasn't company-specific, but Mr. Capellas said Friday that Compaq sales over the winter holidays' top shopping period were strong.
Hewlett-Packard Co., Palo Alto, Calif., also moved on Thursday to distance itself from Gateway's announcement. The PC maker said that its Thanksgiving week sales were ahead of last year and reaffirmed its guidance for its fiscal first quarter.
Separately, Compaq announced plans to buy back up to $1 billion in shares on the open market. Compaq said its board authorized the buyback, which supplants a systematic repurchase program instituted by the company in 1998. That program has been temporarily suspended while the new program is in effect, the company said. |
