Merrill Flash Note
by: skeptically 01/07/02 12:11 pm
Msg: 267206 of 267256
FlashNote
United States
7 January 2002
Investor Support Group Intra-Day Special Call
CPQ
Merrill Lynch & Co.
Compaq (CPQ, $11.78, C-3-2-7)
Volatility Risk: Above Average
• The company preannounced that it would exceed our top and bottom line estimates for
the fourth quarter. Consensus expectations were for a loss $0.03 and revenue of
$7.6 Billion. The company expects revenue in excess of $8 Billion and EPS of about
$0.01-$0.02.
• The company did not give additional details. However, we believe that this upside is
consumer driven as there was increased consumer activity for PCs in the fourth quarter.
• We would not view this as an improvement for the company. We do not see continued
strength from a revenue standpoint for the company into the first half of 2002 in light of
our thesis for the PC industry.
• We believe that this offers potential for Dell (DELL, $29.59, C-1-1-9) to show better top
line results. We also believe that Gateway (GTW, $9.82, C-3-2-9) has a better chance of
showing a profit for the fourth quarter versus the current $0.01 loss expectation. In
addition and to a lesser extent, the results for Apple (AAPL, $23.69, D-3-2-9) may be
better than expected.
(S. Fortuna) |
