To: stephan boileau who wrote (34816 ) 11/24/1999 11:11:00 PM From: taxman Read Replies (1) | Respond to of 74651
Houston, Nov. 24 (Bloomberg) -- Compaq Computer Corp. said its pretax profit will be reduced by as much as $250 million in the fourth and first quarters because of a plan to stop making its high-powered Alpha computer servers run Microsoft Corp.'s Windows operating system. Compaq, the world's third-largest computer maker, expects operating income to be reduced by $50 million to $100 million in the fourth quarter, according to a filing with the Securities and Exchange Commission. The Houston-based company said operating income in the first quarter will be cut by an additional $100 million to $150 million. In August, Compaq said it would stop supporting Microsoft's operating system on its servers that are based on its Alpha processor. Compaq will encourage customers to buy its Proliant servers, which are powered by competing Intel Corp. chips, for future Windows NT versions. ``Our intention is to support customers who deployed Windows NT on Alpha,' said Compaq spokesman Jim Finlaw. The Alpha-based servers will continue to run the Unix and OpenVMS operating systems, competitors to Windows. Compaq got the Alpha chip, considered one of the fastest microprocessors in the world, when it bought Digital Equipment Corp. for $9 billion last year. Sales of servers and workstations based on the chip have declined since the purchase. Redmond, Washington-based Microsoft used Alpha to develop Windows 2000, the successor to Windows NT. Compaq won't sell Alpha-based computers that run the operating system, which is expected to be shipped Feb. 17. Compaq had third-quarter profit from operations of $117 million, or 7 cents a share, compared with net income of $115 million, or 7 cents, in the year-earlier period. Sales rose 4.7 percent to $9.21 billion from $8.79 billion. Compaq shares were unchanged at 25 1/4. They've fallen 40 percent this year. ¸1999 Bloomberg L.P. regards