Elwood. Re: "Does this mean a return of credibility to CPQ?" I think the best answer is "eventually". I doubt it will be an overnight thing. We might get a 1-2 point bump before earnings, but the conference call will be the key.
What it means is that Rosen did not buy the EP/EM "take" on the 1Q. From what we've seen so far, they made the inexcusable faux pas of making the same mistake twice. They overestimated 1Q demand when there was a new INTC chip coming. There may be more but that much we know now.
It also says Rosen lost confidence in EP, EM or both, as the people to fix the problem. While we don't know the internals, Rosen has concluded that the current top management either is in denial or does not have a grasp of the situation to fix it quickly.
Over the next weeks we can expect announcements to focus on "old business" i.e. moving the integration of Digital and Tandem faster (if that's an issue), dealing with supply chain issues (direct vs. channel), and of course new personnel. These announcements will give us clues about where EP and EM went wrong and which one deserves to be fingered (or given the finger) for the screw up.
That's my take.
To your other point I believe that AT&T was in the low 40's when Armstrong took over and it has doubled since then and just split for the 1st time since 1964. Time will tell for CPQ, but my money's on Rosen. This guy is good, based on his past record.
HL |
