Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: rupert1 who wrote (70396)	10/27/1999 7:44:00 PM
From: Elwood P. Dowd	Respond to of 97611

victor...>>>>You've got sixty seconds to answer starting NOW!<<<< Those should be my words to you! El

To: rupert1 who wrote (70396)	10/27/1999 8:25:00 PM
From: rudedog	Read Replies (3) \| Respond to of 97611

victor - 1 - I don't think they plan on driving channel inventory below 2 weeks. My sense is that this was a 1-time hit. They could set the number anywhere they want if they want to suffer the pain, why not do it all in the "bad" quarter? 2 - therefore, none... 3 - I don't think they actually have any parts shortages. In the Q&A section, Capellas seemed to specifically say that those were micro effects but taken as a whole created some uncertainty about 4Q results. I really think he just did not want to set any misleading expectations and is shifting a little to the Intel/ MSFT forward guidance model. 4 - If they continue on the path they are on for commercial desktops, they will be aiming more for profitability than growth in that business - which makes sense. Shift more to systems selling and linkage in major accounts. Capellas said as much in the Q&A. Consumer stands to grow well especially as IBM is leaving the field. I think they will crush HP in that space. That leaves the real revenue gains up to the enterprise group. If that team could turn in a performance like this Q but with another billion taken out of costs, they would be sitting pretty. I don't know if you caught it but Capellas said that they had taken $235M or whatever out of opex so far and intended to take another $1.2B out before the end of next year. Also an additional $500M from supply chain improvements. So after listening to the CC replay about 4 times, I'm pretty happy with where they are heading. I think Capellas has really figured out how to do the "perception" thing. Look at the spin - IBM says PCs are a bad business. HP says PCs are a bad business. One could look at those as self-serving, since they can't win in that market. None the less. folks are buying the story and discounting the future potential for DELL, GTW and CPQ because of it. So CPQ takes the position that they will continue to dominate in that segment, but not bet the ranch on it. The takeaway is that if Gerstner is right, CPQ wins because they are shifting to the enterprise model. If the PC business stays reasonably profitable, CPQ will be the majority player, also profitably.