COMPAQ'S FIRST QUARTER TO BE BELOW EXPECTATIONS BUSINESS/TECHNOLOGY EDITORS HOUSTON--(BUSINESS WIRE)--MARCH 6, 1998--COMPAQ COMPUTER CORPORATION (NYSE:CPQ) TODAY SAID THAT ITS FIRST QUARTER SALES ARE
HOUSTON--(BUSINESS WIRE)--March 6, 1998--Compaq Computer
Corporation (NYSE:CPQ.N) today said that its first quarter sales are
expected to be about the same as those for the first quarter a year
ago. Earnings are expected to be roughly break-even.
Earl Mason, Compaq's Senior Vice President and Chief Financial
Officer, reported that the shortfall was primarily associated with the
North American commercial market where Compaq is taking additional
pricing to meet very competitive conditions.
"We looked closely at our market and business plan once it became
clear that sales out of our North American commercial channels were
not meeting our expectations," said Eckhard Pfeiffer, Compaq's
President and Chief Executive Officer. "We are putting in place price
reductions and aggressive promotions in the first and second quarter
to reduce these channel inventories and accelerate the implementation
of our Optimized Distribution Model (ODM)."
"With these actions, we are attempting to achieve channel
inventories that support ODM by the end of the second quarter," said
Pfeiffer. "Our outlook for the second quarter is cautious as we
continue to assess the North American commercial market environment."
Outlook
"While market conditions will continue to be competitive, we
fully intend to expand our business and grow our market share in
1998," said Pfeiffer. "Timing these pricing and promotional actions to
coincide with the Digital Equipment Corporation acquisition will
position us to take full advantage of that merger."
This release contains forward-looking statements based on current
expectations that involve a number of risks and uncertainties. The
potential risks and uncertainties that could cause actual results to
differ materially include market responses to pricing actions and
promotional programs; continued competitive factors and pricing
pressures; the operational integration associated with mergers and
acquisitions; inventory risks due to shifts in market demand; the
implementation of operations and systems improvements; timely
development, production, and acceptance of the products; and changes
in product mix. Further information on the factors that could affect
the Compaq's financial results are included in its SEC filings,
including the Form 10-K for the year ended December 31, 1997. |
