Compaq Message Board - Msg: 3748502

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Technology Stocks : Compaq

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To: Mike Gordon who wrote (22261)	3/18/1998 4:55:00 AM
From: KAD	Read Replies (1) of 97611

Mike: Great post/math lesson. I was bewildered too when they said "breakeven" earnings. I believe they actually said that the actions they would take would lead to this and there would be no inventory write off. Revenues go from 6.8 bill to 5.3 bill and earnings to 0. Even if there is margin pressure, don't believe margins would equal SG&A (marginal) costs. Also the <1K units are in demand as they were all in consumer. Hopefully we'll find out soon, but we could speculate... other actions perhaps, marketing, the free monitors.. KAD

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