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

To: jim kelley who wrote (70698)	11/1/1999 10:19:00 AM
From: rudedog	Read Replies (3) \| Respond to of 97611

Jim - Regarding IBM, you say Its stock ran up not because of mere psychology but because its earnings were showing significant growth So based on your statement, if CPQ showed similar earnings growth (say .07, .25, .40. .60 or whatever) would it see a similar rapid increase in stock price independent of market share or revenue percentage gains? If so, then the question is whether CPQ will be able to show those earnings trends. The guidance from CPQ management in the 2Q CC was that they intended to take between $700M and $900M in charges in 3Q for restructuring which would generate a $2B reduction in OPEX by the end of 2000. They seem to be on target against that goal. If the restructuring yields the benefits they claim, the OPEX reductions alone will generate nearly $1.00 in EPS in 2000. I suppose a cynical person could say "they are just lying about that" or something but the strategy holds together, and if executed will generate the same kind of results that you claim drove up IBM's share price. Time will tell if CPQ can walk like they talk.