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Technology Stocks : Compaq
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To: Captain Jack who wrote (55575)4/5/1999 6:59:00 AM
From: rupert1  Read Replies (4) of 97611
 
Captain: "although CPQ said they did not warn Reuters believes Mason did evidently"

That's why you have to be a skeptical reader. Commentators, journalists, gurus and even some analysts, do not have the time to study companies in depth. They feed off 2nd and 3rd hand reports. In no time at all, the opinion of one can become the misconception of another and then the received wisdom of everybody.

It may be useful to remember that Mason was referring to a slow January in desktops in the SMB sector only. All other products and services were on track, even in January and February. In his late February conversation with CSFB we are told his estimate was that the effect of the "slowdown" - unless it was compensated with higher sales in the second half of the quarter - was 1 cent eps. He attributed 2 cents to one-time losses from the devaluation of the Brazil currency.

We are also told that the rest of February and the first half of March was on track and that late March saw at least a modest pick-up.

I have suggested in previous postings, that the estimate of 2 cents loss from the Brazil devaluation was a worse case scenario and the loss might be half of that. Furthermore, it is possible that the loss will be a charge and will not count in the "operating" eps.

The matter is further confused because the CSFB report - on which practically the whole community of analysts and most commentators and journalsits have relied on a 2nd, 3rd and 4th hand basis - does not make clear whether Mason was using COMPAQ's own private targets as a base or CSFB's original estimates.
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