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

To: hlpinout who wrote (82782)	6/18/2000 8:19:00 PM
From: Captain Jack	Respond to of 97611

HIO-- Just so they are lowballing the last sentence they can pull it off for investors. 0.21 sounds more like it should be 0.23..... - Compaq Computer Corp. (CPQ) Vice President Mary McDowell is seeing aggressive pricing from International Business Machines Corp. (IBM) to grab a share of the Intel Corp. (INTC) server business. A Compaq spokesman said the Houston-based computer maker's second quarter remains in line with previous guidance and is looking for a stronger second half of the year. Analysts estimate Compaq will earn 21 cents a share in the second quarter and $1.08 this year. In April, Compaq said it backed analysts' estimates for 2000, though second-quarter earnings might come in below expectations because of marketing expenses.

To: hlpinout who wrote (82782)	6/19/2000 9:45:00 AM
From: profile_14	Respond to of 97611

hlpinout, no I had not. The article seems positive but I have a hard time buying the Gateway story, especially after the comments that Compaq and Dell made regarding European PC growth patterns. I also think that the Gateway model is one with diminishing returns, as I believe that each store that you open has a greater chance of having an incrementally lower return due to market saturation and a less favorable location. The commentary regarding IBM's pricing is interesting, but there is an issue of momentum in sales that dictates that it takes a while for aggressive pricing to change customer behavior. Given the recent commentary from Compaq that they would not be losing sales to Dell on price, I expect the same to hold true relative to IBM. If I recall correctly, IBM typically reports earnings about 10 days before Compaq does, so this may be a push on IBM's part to hit the numbers, who knows? I know that IBM's previous guidance had been cautious until later this year, unlike Compaq's, which had been the most bullish in the sector, if I recall correctly.