jdn, the stock closed +ive so i m +tive. read news on yahoo. 500th server shipped.. $1m/pc. on avrg 125++/qurter.
darling darwin is flying....
Addi is right "preception" is holding this stock back, but when
the rubber hits the road we will see who comes in w. earnings.
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as for cpq .... it's gona barf up on earnings...loses losse...
hwp losses losses...
mony is got to be going somewhere.
Top Stories: Compaq Hints at a Second-Quarter Loss
By Eric Moskowitz
Staff Reporter
6/3/98 12:38 PM ET
Compaq Computer (CPQ:NYSE), struggling with bloated inventories, is hinting that it
could report a second-quarter loss.
In a closed-door breakout session today at the PaineWebber Growth & Technology
conference, Earl Mason, the personal computer maker's chief financial officer, indicated
that Compaq is headed toward a money-losing quarter, according to two people who
attended the session. Analysts currently expect the company to earn a penny a share in
the period, according to First Call.
(Both money managers who attended the meeting asked to remain anonymous. One is
short Compaq and the other doesn't have a position in the stock.)
The loss would follow a poor first quarter in which Compaq earned just $16 million, or 1
cent a share. For its year-ago second quarter ended June 30, 1997, Compaq earned $422
million, or $1.48 a share, before charges, on sales of $5.01 billion. Year-ago per-share
figures don't reflect at 2-for-1 stock split that took effect in January.
Compaq shares were up 11/16 at midday Wednesday at 28 1/8.
Compaq's problems stem from the fact that declining demand has left it with fat
inventories. The distribution channel is so full that one reseller, CompuCom Systems
(CMPC:Nasdaq), said in a separate presentation that it has stopped buying from Compaq
for now. The declining demand also comes at time when PC sales are traditionally slow.
In addition, PC prices are plummeting. Ed Anderson, CompuCom's president and CEO,
said prices at CompuCom plunged 22% in May after falling 18% during the March
quarter. And he doesn't expect near-term improvement.
Compaq itself has contributed to this environment. Earlier this year it said it would
"immediately reduce prices and aggressively promote commercial products in North
America in order to reduce channel inventories." And in the company's first-quarter
earnings release, Mason said, "It will take another quarter of adjustment to put the
company's core business on a track of improved profitability."
In the midst of this environment Compaq is trying to flush its bloated inventory channel, a
tough proposition at best.
But Compaq apparently wanted to limit the information. It was likely the only company at
the conference at New York's Grand Hyatt to close its regular presentation to reporters.
Then the company closed its breakout session as well, which is a more common practice.
Mason said, however, that Compaq expects an improved second half once the inventory
channel clears, according to people in the meeting. Compaq also expects a boost from the
introduction of Microsoft's (MSFT:Nasdaq) Windows 98 later this month.
A Compaq spokesman wasn't immediately available for comment. |
