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Technology Stocks : Compaq
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To: Andreas who wrote (60328)5/2/1999 10:21:00 PM
From: Loki  Read Replies (1) of 97611
 
Andreas...Forget the exact number .16 (.22 - .23)
because of higher SGA, that was an example, in extreme.

In the postulation of SGA the idea was to try to
find the analysts' view and what they might have used.

Very likely they would not use 12% with the addition of
DEC, but possibly something lower than what it ended up to
be in Q1 99.

If I didn't word that point correctly...it's my fault.

You are correct..."The key is what did the analyst community use in their assumptions for each component of the income statement?"
(who did you ask...anything that can help in determining this
question?)

I believe that your conclusion has incorrect %'s SGA to REV. (???)
Q4 98 - 14.4% and Q1 99 - 15.7%.....If Q4 98 was used to compare
to Q1 99 (Q4 and Q1 are different cycles) then the trend of any
improved SGA reversed itself in Q1 99. (Also 98 8K report states
an expected improvement in SGA for 99) Didn't happen in Q1.

In any case it was stated many times that SGA was a contributing
factor not the only reason CPQ was .16/shr short.

Sorry for any confusion.

Compare DELL SGA to REV's (maybe analysts were influenced by this)

96...11.3%
97...10.7%
98... 9.8%

Loki

BTW...maybe I missed something, but did you compare COGS Q to Q?
...and how it relates to revenues...it surprisingly didn't look
that bad.
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