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Technology Stocks : Compaq

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To: Roads End who wrote (52957)3/12/1999 9:09:00 AM
From: rupert1  Read Replies (1) of 97611
 
Riechers: Mason said that top line sales slowdown in sales would cost 1 cent off CPQ's bottom line targets, unless it was compensated by increased sales in Feb/March.

The possible 2 cents cost of the Brazilian currency was not off the top, but off the bottom line and was not related to volume of sales.

The company said it was not guiding analysts to reduce their original estimates.

Actually, given what we know, it is conceivable that top line sales will be softer. WS is prepared for this by market surveys. So I think renewed emphasis will be put on the bottom line - to see how companies can continue to grow profits in this climate. CPQ ought to have the advantage if its diversification story works out. No doubt its bottom line will be helped by further cost-cutting and efficiences from the merger as well as tax credits.
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