Pfeiffer: Compaq troubles just a 'hiccup' (yeah, sure!)
By Charles Cooper, ZDNet
Updated at 10:25 AM PT
HOUSTON -- Compaq Computer Corp. CEO Eckhard Pfeiffer said Tuesday the company's short-term
troubles on Wall Street will not shadow the computer maker's long-run prospects.
Late Friday Compaq (NYSE:CPQ - news) warned that its first quarter earnings would fall far short of
Wall Street's expectations. Analysts immediately raised red flags, expressing concerns about the
company's ability to successfully digest earlier acquisitions.
When the stock market opened for trading on Monday, investors punished Compaq's stock, sending it
down over six points. But during a keynote address to several thousand Compaq customers gathered
here for a company-sponsored conference, Pfeiffer suggested that the episode was just a passing
hiccup.
"This will not slow us down. We will move forward aggressively," said Pfeiffer, less than a minute into his
keynote address. "We fully intend to expand our business and grow market share profitably in 1999," he
said.
That was the last reference to current events as Pfeiffer then segued into his prepared remarks outlining
the company's objective of raising its profile in the market for Internet-based business.
"Our goal now is Internet leadership," he said.
A motivated shareholder
During a question-and-answer session later Tuesday morning, Pfeiffer said securities law restrictions
prevented him from going into more detail until the company officially announces its earnings later this
month.
But, asked whether he -- personally -- believes in Compaq's stock as a good investment, Pfeiffer's face
broke into a broad smile.
"I'm a significant owner in Compaq stock, and if anybody has an incentive to make the stock move up,
it's me," he said.
But Compaq officials acknowledge they have a tough selling job ahead of them. Indeed, the company
clearly is on the defensive, as it looks to ward off challenges, particularly from direct vendors such as
Dell and Gateway.
At a disadvantage?
Still, Pfeiffer strongly disagreed with suggestions that Compaq is at a disadvantage versus the direct-PC
makers.
He said the company provides a range of products and services to customers just as efficiently as the
competition.
But Kimball Brown, an analyst with Dataquest Inc., said Compaq still needs to bite a bullet that so far,
is not to its liking.
"They're getting killed on the issue of offering price protection to their dealers -- and that's something
that Dell doesn't need to worry about," he said. "They've still got challenging problems to deal with."
Big plans for AltaVista
Pfeiffer said Compaq wants to turn AltaVista, the company's Internet search site, into a "leading
business site." He added that AltaVista now registers a billion page views per month.
Senior Vice President John Rose, who followed Pfeiffer on stage, echoed his boss, saying Compaq
intends to challenge rivals who are also jockeying for post position in the exploding Internet business
market.
"We have strong products, services and solutions for all your e-business needs today," he said.
But although Rose similarly touted the company's high-end product offerings, he was short on detail as
he made an expansive product pitch to customers in the audience.
Details still to come
Indeed, Compaq is using the Innovate '99 conference to bring together previously announced policies
under a single umbrella -- a point acknowledged by Pfeiffer as he ducked out of offering a broader vision.
"We've been doing all these things -- we're just bringing more focus and giving it a name," he said,
adding that Compaq sees a huge business opportunity supply Internet structure and services.
"And as we figure that out in total, we'll announce it."
See Also:
Compaq spurs Digital technology
Compaq earnings dip below projections |
