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Technology Stocks : Compaq
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To: rupert1 who wrote (54275)3/20/1999 4:22:00 PM
From: rupert1  Read Replies (1) of 97611
 
If Brazil accounts for 1 or 2% of sales - both figures were given, and assuming the reference is to 1Q sales, then the total sales to Brazil is $91 million or $182 million based on COMPAQ guidance that sales are nearer $9.75 billion or $99 and $198 million if the figure of $9.95 billion is the base.

The write-off is because of devaluation. Even allowing for a 50% devaluation of the Real, the write-off would be $46-49 or $91-99 million. (Does anybody know the actual devaluation figure?) I just don't get the $200 million, unless it is a write-off of combined receivables from 4Q and 1Q. But since this information arose from an operational review one week before the CSFB meeting - so in the first week of February, COMPAQ would have had an opportunity to hedge future losses in 1Q.

If the write-off is mainly against 4Q then it does not reduce 1Q sales, it is a charge.

Furthermore, if the $200 million was an exaggerarted conservative estimate which has not been realised, then COMPAQ's cautions about 1Q revenues may also be exaggerated.
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