Kemble, here's some additional information on CPQ:
HOUSTON (AP) -- Compaq Computer Corp. stunned the technology world again Sunday, ousting chief executive Eckhard Pfeiffer nine days after it warned Wall Street that first-quarter profits would be half expectations.
Pfeiffer, the executive who built Compaq into the world's largest personal computer maker, has struggled to maintain profits while PC prices are plummeting. The company has also had difficulty integrating two acquisitions, Digital Equipment Corp. and Tandem Computers Inc.
''What this says is that things (at Compaq) are more screwed-up than even the results would have you believe,'' said Aaron Goldberg, vice president and principal analyst at Ziff-Davis Inc. in New York.
Earl Mason, Compaq's chief financial officer, also resigned Sunday. While the company called his move unrelated, the two departures will mean broad changes in Compaq's leadership as it copes with the biggest challenge since its founding in 1982 as an upstart to then-dominant IBM.
Goldberg predicted more executives will leave.
Compaq said on April 9 that it expected to earn 15 cents per share in the first quarter on revenue of $9.4 billion -- $600 million lower than expected. First-quarter results are due out Wednesday.
Shares of Compaq, which traded as high as $51.25 earlier this year, dropped 22 percent on April 12, the first day of trading after the announcement. Compaq closed Friday at $23.62 1/2 on the New York Stock Exchange, barely above its 52-week low of $22.93 3/4.
''We think the increasing complexity in changes in our business have required a change in leadership,'' chairman Benjamin M. Rosen said in an interview Sunday. Rosen, Compaq's chairman since its founding, was named acting chief executive while the company searches for a permanent successor.
''We have re-energized this company before and, working together, we will do it again,'' he said.
In a statement, Pfeiffer stuck to the positive. ''Compaq has come a long way since I joined the company in 1983,'' he said. ''We are a world leader in personal computing, enterprise computing and Internet applications.''
Rosen said Mason was leaving because he was offered ''every CFO's dream: to be chief executive officer of a company.'' He didn't identify the company, other than to say that it was in a different industry. Compaq treasurer Ben Wells will take on Mason's duties at least on an interim basis.
Pfeiffer took over as CEO in October 1991 and also held the title of president. His belief in a computer run by a Microsoft Windows operating system and powered by an Intel microchip help solidify the ''Wintel'' platform as the dominant one in the industry.
In 1998, Compaq shipped 12.8 million computers worldwide to gain 14 percent of the market, according to the research firm Dataquest Inc.
But Compaq has struggled to maintain profits in an environment in which prices are dropping fast and sales of personal computers for under $500 -- or even less -- are growing.
Compaq sells computers through a traditional distribution structure that includes resellers who act as a middleman and take a share of the profits. This has placed it at a disadvantage against companies such as Dell Computer Co. and Gateway, which sell directly to customers by phone or over the Internet and allow customers to create any kind of system they want.
Compaq has faced difficulty emulating this model. Analysts said it has alienated its resellers who are apt to see Compaq as a potential sales rival and instead may focus on selling other companies' brands.
Rosen indicated Compaq will continue to allow customers a choice in how they buy computers.
''Our feeling now is that we shouldn't dictate how a customer buys a computer, whether it's directly, through a value-added reseller or through the Internet,'' he said.
Rosen said Compaq is well-positioned as a major player on the Internet, but Goldberg said the company has done little to take advantage of the Net so far.
''It's like the NFL draft: You have 31 guys based on potential, but haven't done anything yet. Compaq has tremendous potential but hasn't done anything yet.''
Compaq has also said it plans to boost the computer services it offers business customers as a way to shore up declining profits from computer sales.
Adding to its woes, analysts say Compaq's purchase of Digital Equipment last year for $9 billion, has yet to pay off. Sales of Digital's minicomputers -- medium-sized corporate computing systems that are smaller than mainframes -- have disappointed Wall Street.
In addition, Compaq has had its hands full swallowing Tandem Computers, which it bought in 1997. Tandem makes computer systems with technology that helps clusters of computers run together and continuously, overcoming such problems as power failures.
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