Gary:
CPQ,... still suggesting that the quarter is "shaping up well".....
- Check what happened last year. Same kind of general remarks, but quarter was a big disaster and analysts were completely taken in. Also, "shaping up well" could be interpreted to mean anything,....not quite definitive.
- CPQ wrote down DEC by $5.0 billion,....lots of room for accounting fun. Check out DEC's many divisional sales, and clean balance sheet before the arrival of CPQ There was little left to be written down
- "We absolutely, positively never stuffed the channel" Herr CEO, January, 1997. Sounds like, "I never had sex with,...." (g)
Why "Bashing services"?
- Lower margin business than what it replaces, (hardware, software, maintenance).
- Multi-year contracts provide plenty of room for questionable booking practices.
- In IBM's case, the remarkable coincidence of how it grows each quarter, just enough to offset the shrinking revs in the other divisions.
- Massive liabilities, depending on what has been promised, vs. what gets delivered. (Y2K promises? performance promises? system "up and running by promises?...there are already lots of suits percolating in this area).
"Revs will be up at CPQ, GTW, etc....." Based on,....?
"Went Negative",.....Global PC revenues were down 1998 compared with 1997.
"Growth is projected to increase industry wide in 1999 compared with 1998". Units or revenues? According to?
I suspect that all players will have difficulty growing their revenues with the corporate sector taking a buying holiday, but I'd be surprised more than surprised if any grew their bottom lines consequentially, which could crater the growth type PEs.
Best, Earlie |
