Compaq Message Board - Msg: 3727591

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Technology Stocks : Compaq

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To: Jack T. Pearson who wrote (22073)	3/16/1998 3:33:00 PM
From: Ramsey Su	Read Replies (2) of 97611

Jack, "Compaq is writing off $500M because they have 250,000 PCs sitting on the shelve.." it is generally more common to use one time write-offs to reflect non-recurring expenses. The question is not whether compaq is writing off $2000 or whatever per PC. I am questioning why the double counting or accounting. If they are writing off this inventory problem, then earnings should not be affected. If they choose to take the hit in earnings, then there is no need for a special write/charge off? Is CPQ's problem more than this 250K inventory? Ramsey

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