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

To: Andreas who wrote (76591)	1/25/2000 7:03:00 PM
From: Captain Jack	Respond to of 97611

Andreas--- expectations were LOWERED! REVs are important to the mkt although I have a problem with that as the cost of boxes comes down as to this point CPQ is still a box maker in most minds. A boxmaker losing share,,, and 15% is not a growth tech stock people will want to buy or hold,,

To: Andreas who wrote (76591)	1/25/2000 7:20:00 PM
From: phileasfogg	Respond to of 97611

Andreas, Can you read? "The segment which generates most of Compaq's profits" as reported in in the news section: Sales of servers, the computers used to manage networks of other computers, accounted for 51 percent of total revenue and totaled $5.3 billion, down 3 percent from a year ago, Compaq said. However, that figure was 8 percent above 1999's third quarter. The segment, which generates most of Compaq's profits, saw operating income of $714 million, off 17 percent on the year. Compaq was hardest hit in the category for which it is perhaps best known -- commercial PCs -- where revenues amounted to $3.1 billion, down 19 percent from a year ago, but up 15 percent from third-quarter sales. The unit, which accounts for 30 percent of total revenue, posted a loss of $79 million -- a reversal from the profit of $157 million a year earlier. The consumer PC business remained a bright spot, as the unit reported record revenue of $2 billion, up 24 percent from the year-earlier period and up 34 percent from the third quarter. Compaq benefited from the exit of rival PC makers from the U.S. retail market, including International Business Machines Corp. (NYSE: IBM) and Packard Bell NEC Inc., a division of Japan's giant NEC Corp.(NASDAQ: NIPNY) For your information: i) The majority of Compaq revenues came from the Enterprise group (ESSG) in a quarter where consumer PC sales are strong (Xmas sales) and where Y2K froze enterprise application deployment (the core of Compaq server business) ii) Do you think server platform like the NonStop Himalayas (which support all leading stock markets), the "Wildfire" Alpha server solution or the Proliant 8 way enjoy PC margins? We are talking about server solution sales which take months to complete. iii) Storage (StorageWorks ENSA architecture) is a highly profitable market (ever heard of EMC, Data General/Clarion division, Brocade?) where Compaq is ranked number 1 In conclusion: Commercial PCs wiped out the profit of the consumer PC division -zero sum game- in other words, all profits shown by Compaq belong to the server division. So much for your box mover profile.Welcome in the year 2000.

To: Andreas who wrote (76591)	1/25/2000 9:53:00 PM
From: rudedog	Read Replies (1) \| Respond to of 97611

Andreas - re:CPQ showed us again this quarter that so far it is still just a box maker. Profits were in consumer pcs. I beg to differ - the enterprise group made 10 TIMES the profit of the consumer pc team... Did cpq make any money in server segment? Looks to me like it was over $700M... about a 14% net, better than 3Q and WAYYY better than SUNW... BTW larger as an absolute number as well as a percentage. I'm not sure where you get the idea that the "other crap" is not adding to profits , it IS the profit for all intents and purposes.