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Technology Stocks : Compaq
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To: rudedog who wrote (56775)4/10/1999 4:57:00 PM
From: jim kelley  Read Replies (2) of 97611
 
Dog,

There you go again Dog intentionally misrepresenting my position on CPQ again. If you want to play this game,...Your estimate of CPQ earnings was 37 cents which of course means you were off by 150% this quarter.

My position on CPQ was that they would make their estimates IF they could stuff the channel. The channel has 5-6 weeks of inventory in it.
Kumar pointed this out in his 20 cent estimate as the reason that CPQ would not meet estimates. Obviously, the channel would not allow itself to be stuffed. Look for a big inventory buildup inside CPQ this quarter!

It looks like you bit the big one this time with your CPQ position.
Perhaps, you can make up some of your losses with your DELL position.

I have said before that any single quarter of CPQ's earnings can not be trusted because it is impossible to tell what are their real sales to end customers. CPQ sells to the channel as you know. CPQ's results have to be averaged to approximate their real situation.

Averaging 20 + 31 yields 51 cents earnings for the two quarters- Q4 and Q1. The reported numbers are 42 and 15 which yields 57 cents for Q4 and Q1. So I am light about 11% for the two quarters.

You should be worried more about your own estimates as they appear to be off by 40% too high for the two quarters. Not too good for a guy that claims to have so many inside connections to CPQ executives.<VBG>

I find it interesting that you herald Kumar prediction but still claim that CPQ did not stuff its channels in Q4. Why? because Kumar cites this as the principal reason for his 20 cent estimate. Its looks like he was only off by 33% this quarter.
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