Compaq Refutes Analyst's Questions About Its Data, WSJ Says
By Edvard Pettersson
Houston, March 6 (Bloomberg) -- Compaq Computer Corp. refuted questions UBS Warburg analyst Don Young had raised about how it accounts for sales incentives to dealers, the Wall Street Journal reported, citing company officials.
Young misread the impact of the company's adoption of new accounting standards, Compaq's Chief Financial Officer Jeff Clarke told the paper. Young had argued that the computer maker's adoption of a rule that details how a company should match expenses to revenue may have given it a $156 million boost to its 2001 results, the paper reported.
At issue is the way Compaq accounted for incentives to dealers that in the past were not necessarily booked in the same quarter that the sales were booked, the Journal said. Young was disturbed by the size of a reserve Compaq for the accounting change because it could have provided an opportunity to shift expenses around and manage earnings, the paper reported.
Compaq denied that the reserve provided a hidden boost to earnings, the paper said, citing Clarke. Other Wall Street analysts have criticized Young's analysis as ``unfair,'' the Journal said, citing Salomon Smith Barney analyst Richard Gardner Jr.
(WSJ 3-7) |
