Dog,
I see you are talking about me again.
Never claimed to be a psychic. CPQ's problems have been obvious for more than a year to anyone who wanted to see them. I have forecast correctly the rise of DELL and the relative decline of CPQ based on the management teams and this business models.
Actually, your forecasts were worse than mine and by a sizeable amount they were to high. My estimates were a too low which is a more conservative position to take.
The real significance of my opinion (IMO) on CPQ is that I have been expecting these problems with the company for the last year and a half. I shared this information.These problems have now been outed and there will be more outings to follow with this company. That is why they have ~11 lawsuits against them for scamming investors.
After looking at CPQ's reports for many quarters it has become clear
to me that a single quarterly report should not be used in estimating the company's performance.CPQ's quarters must be averaged to take out the channel stuffing. See for yourself:
Q4-99/Q3-99
1 Compaq 4,202 15.4% 3,198 14.4% 31%
2 IBM 2,665 9.8% 2,028 9.2% 31%
3 Dell 2,291 8.4% 2,032 9.2% 13%
Q1-99/Q4-99
1 Compaq 3,529 14.3% 4,194 15.3% -16%
2 Dell 2,440 9.9% 2,315 8.4% 5%
3 IBM 2,179 8.8% 2,677 9.7% -19%
Using these IDC numbers the actual unit shipment growth for CPQ and IBM are jumping from positive to negative territory while DELL's unit shipments are constantly increasing. When the excess units are not sold quickly CPQ and IBM must pay price protection on the units not sold out of the channel. These price protection payments actually distort the earnings picture for the company to the shareholders disadvantage.This makes it possible for CPQ to report great sales in Q4 and worse sales in Q1 along with terrible profits..
I think you have a winner here! |
