Compaq Reports Record Fourth Quarter Revenue and Earnings-News just in.
Tim:
Let's look at it this way,if Dogpaq and do this good look what DELL
will do, I see the stock between $100-$120 by Feb,yup you heard me right.<g>
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Company news release.
Growth At Greater Than Three Times The Market Digital Acquisition Accretive
HOUSTON, January 27, 1999 - Compaq Computer Corporation (NYSE:CPQ) today announced worldwide sales of $10.9 billion for the fourth quarter ended December 31, 1998, an increase of 48 percent compared to sales reported for the fourth quarter of 1997. The Company reported a profit after tax for the quarter of $758 million, or $.43 per share.
"The fourth quarter revenue and earnings results represent new records for Compaq and a key milestone in our successful integration of Digital Equipment Corporation. Sales out of the distribution channels grew 43% over the fourth quarter of 1997, a growth rate estimated at over three times the market," said Eckhard Pfeiffer, Compaq's President and Chief Executive Officer. "1998 was a year of significant transformation for Compaq, and with our strong fourth quarter results, we enter the new year with a great deal of momentum and optimism."
"Achieving our goal of earnings accretion for the combined companies of Digital and Compaq in the fourth quarter is a significant achievement and reflects tremendous execution of our integration plans to date," said Earl Mason, Compaq's Senior Vice President and Chief Financial Officer. "The synergies from the Digital acquisition are becoming more and more evident in our financial performance. Sequential revenue growth in products was exceptionally strong, and we continue to gain momentum in our service businesses. Gross margins improved by a point and a half from the third quarter to 26.4 percent. Operating expenses declined sequentially both in absolute dollars and as a percent of revenue, ending the quarter at 18% versus 23% for the third quarter. On the balance sheet, cash remained strong at $4.1 billion while inventory turns increased to 15.9 versus the 12.4 reported in the third quarter, and days sales outstanding improved by 2 days to 56. Return on invested capital grew significantly, from 7.5% reported in the third quarter to 38.6 %. Our fourth quarter results and the successful integration of Digital over the last six months represent major steps along the way to truly becoming a "New Breed" computing company."
Outlook
"We continue to see strong demand for Compaq products and services and the opportunity for continued market share gains and revenue growth," said Pfeiffer. "With the majority of the Digital integration now successfully behind us, we enter the new year ready to completely unfold and deploy the strategy we have been working towards for the past year and a half. From continued leadership in the personal computer market to complete enterprise solutions and services to an aggressive Internet focus led by our new AltaVista Company, we are completely engaged as a full line Global IT provider and strategic partner to our customers."
"As we enter the first quarter of 1999, we will maintain our focus on the basics looking to improve both income statement and balance sheet performance in support of continued growth in return on invested capital," said Mason. |
