Friday April 9 5:46 PM ET
Compaq: 1st Qtr Far Below Expectations
HOUSTON (Reuters) - Compaq Computer Corp. (NYSE:CPQ - news) Friday said it expected to post a first quarter profit of about 15 cents a share, less than half of what Wall Street expected from the world's largest personal computer maker.
In a statement released late Friday, the Houston-based company estimated revenues for the quarter ended in March 31 would be $9.4 billion, resulting in earnings per share of about 15 cents. By contrast, the consensus among analysts had been 31 cents a share, according to a First Call Inc. survey of brokerage estimates.
''The quarter's shortfall reflects lower than anticipated market demand and increased competitive pricing in the commercial PC sector,'' Chief Financial Officer Earl Mason said in the statement.
His comment echoed comments he had made to a group of investors in late February when he signaled that commercial sales of Compaq PCs, especially to small and medium size businesses, were weak in the first six weeks of this year.
''While market conditions will continue to be competitive, we fully intend to expand our business and grow market share profitably in 1999,'' said Eckhard Pfeiffer, president and chief executive. ''The company will continue its aggressive drive of reduction of cost and operating expenses in the face of a very competitive market.''
A Compaq spokesman declined to comment further. The company said the forecast is preliminary and that final results for the first quarter will be reported on April 21.
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