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

To: Andreas who wrote (79928)	3/23/2000 3:27:00 PM
From: rudedog	Respond to of 97611

Andreas - re: This nonsense that cpq is going to warn because ipaq sales are less than projected is, imho, pure baloney Let's take a look at that and apply what we know. At a run rate of $1B annually, the iPaq contribution to revenue of even 8 weeks of sales is still less than $200M, assuming that the product ramp was a step function - at 7% net margin, that implies the whole potential contribution to earnings from iPaq would be a maximum of $14M, or less than .01 EPS. How much of a shortfall would it take to produce a warning? Well, iPaq has been on sale for 7 weeks. 4 weeks ago the GM of that division said it is running at twice projected run rates. So even if for some reason customers STOPPED BUYING iPaq COMPLETELY the day after that statement, they would still be ahead of projections... there is no chance, based on that data, that iPaq could possibly contribute to low earnings, and even if it did, the impact would be a fraction of a penny. So just on the face of it this rumor is absurd.