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

To: Elwood P. Dowd who wrote (93555)	11/2/2001 5:15:18 PM
From: Night Writer	Respond to of 97611

Merrill cuts Compaq to "neutral" NEW YORK, Nov 2 (Reuters) - Merrill Lynch said Friday it has cut its rating on Compaq Computer Corp. <CPQ.N> to mid-term "neutral" from "accumulate" on concerns about the economy and pricing competition. Analyst Steve Fortuna, in a research note, said he has a "bleak" outlook for the company for "at least" the next two to three quarters. "Compaq sales and profits clearly have been hurt, not only by global economic weakness, but also by a brutally competitive pricing environment driven in large part by Dell," he wrote. Fortuna said the improvements management have made in the past two years "are not sufficient to drive sustained profitability in the current environment." He said the proposed merger with Hewlett-Packard Co. <HWP.N> may be responsible for some of the weakness. Compaq shares fell 20 cents to $8.95 in early Nasdaq trading. ((--Chicago Equities News at 312-408-8787, chicago.equities.newsroom@reuters.com)) REUTERS

To: Elwood P. Dowd who wrote (93555)	11/2/2001 5:16:12 PM
From: Night Writer	Read Replies (1) \| Respond to of 97611

Merrill cuts Hewlett-Packard EPS NEW YORK, Nov 2 (Reuters) - Brokerage house Merrill Lynch on Friday said it lowered its 2002 earnings estimate for Hewlett-Packard Co. <HWP.N> to 75 cents per share from 98 cents per share based on general economic weakness and feedback from industry sources. Merrill also lowered it 2001 outlook to 76 cents per share from 82 cents per share. It cut revenue estimates for the October quarter to $10.5 billion from $11.1 billion and lowered its earnings estimate to 9 cents per share from 15 cents per share. Merrill cut 2002 revenues to $44 billion from $45.1 billion. The stock was off 45 cents to $16.85 a share in early trade. Merrill said the cuts are due to weakness in the enterprise business and a loss of productivity related to its merger with Compaq Computer Corp. <CPQ.N>. Merrill also said it sees modest stabilization in inkjet printer demand and declining demand for mono and color lasers. Weak printer volumes and aggressive hardware pricing means that consumables revenue growth will likely slow further, Merrill analyst Tom Kraemer wrote. In addition, weak corporate technology spending expectations for 2001 and 2002 mean that HP's server and services businesses will slow. Merrill also cut its rating on Compaq to a "neutral" from "accumulate" on Friday, citing a bleak outlook for the company in the next two to three quarters. ((New York Technology Desk, 1 646 223-6181)) REUTERS