ELWOOD---THEY DID MEET ONE OBJECT--Dow Jones Newswires -- June 11, 1998
Compaq Says Inventories 'On Track' For 4-Week Goal By June
By Mark Boslet
PALO ALTO, Calif., (Dow Jones)--Compaq Computer Corp. (CPQ) said it will achieve approximately breakeven results for its second quarter, not including charges for its acquisition of Digital Equipment Corp.
The quarterly results will include two weeks of combined operations after the two computer makers approved their merger today.
Chief Financial Officer Earl Mason also said Compaq is on track to have it worldwide inventories at four weeks of sales by June. Four weeks would bring the inventories to a level the company is happy with, Mason told Dow Jones.
Compaq has suffered from large inventories of business computers since the end of last year and has seen its growth slow as a result.
The Houston computer maker also detailed plans to reduce its postmerger workforce. Compaq will eliminate 15,000 jobs at Digital and 2,000 in Compaq and Tandem operations, Mason said. That will leave a workforce of 67,000.
The job cuts are meant to do away with redundancies, he said. The company expects to unveil plans for reducing and consolidating manufacturing facilities later this month.
Compaq's new mission is to create a company with the streamlined efficiencies of a PC maker and the quality of service of a more full-featured computer company, Mason said.
Analysts expect one efficiency Compaq will adopt is eliminating the Digital line of desktop computers.
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