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Technology Stocks : Compaq
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To: PCSS who wrote (50940)3/2/1999 7:59:00 AM
From: rupert1  Read Replies (2) of 97611
 
Michael: When I first made my "composite sentence" summary of what we knew, at the weekend, I was accused of moulding the news by another poster. In that composite summary I also included other reported "factoids" which I got from the 8 analysts reports posted by Aitch and the news report posted by helpinout. I have not included those in the enumerated post I made last night which is different from the one you referred to in your posting. For completness sake here goes:

Enumerated list: Message 8097804

Additions:

1. CPQ stated that second half February sales had picked up and were strong.

2. CPQ stated that March sales looked good, but because of the slow start to the quarter, the question was whether CPQ could ship enough units in March to meet its targets for the quarter.

3. CPQ stated that currency devaluation in Brazil might cost 2 cents on CPQ revenue targets for the quarter.

In all of the many posts I have seen, including analysts reports, and reports on analysts reports, I have noticed two common errors:

(a) One analyst and some journalists state that the Brazil currency problem has been calculated by CPQ to cost something more than 2 cents on CPQ's targets. (Actually CPQ said it was 2 cents. One analyst was of the opinion that it would probably be less.)

(b) Many seem to assume that the Brazilian costs arise from poor sales - in fact it has nothing to do with sales or channel. It is the loss suffered when the currency devalued.

It is a one-off charge. But so many analysts and media have added the 1 cent sales related cost and the 2 cents currency related cost and come up with 3-5 sales related costs. They are aying that a shortfall in sales accounts for 3 cents or 5 cents. It is true that the 3 cents cost announced by CPQ depletes CPQ target for revenues by that amount but only 1 cent arises from slow sales.
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