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

To: Jack who wrote (20069)	3/6/1998 6:50:00 PM
From: chuckie	Respond to of 97611

I posted the complete CNBC transcript of the breaking COMPAQ news at home.sprynet.com I will try and post transcript updates as they become available. The Intel Page

To: Jack who wrote (20069)	3/6/1998 6:50:00 PM
From: werefrog	Read Replies (1) \| Respond to of 97611

CPQ will take hit Monday 3/6/98 Compaq Warns Price Cuts In U.S. Market Will Hurt 1st-Quarter Re HOUSTON -(Dow Jones)- Compaq Computer Corp. late Friday warned it expects to report only break-even results in the first quarter on flat sales compared with a year ago, reflecting price cuts as the company fought for market share in the fiercely competitive North American commercial sector. The disclosure by the nation's leading personal computer maker, which came after the close of U.S. markets Friday, marked the third-straight day that a leader in the technology sector warned of disappointing first-quarter earnings. Chipmaking giant Intel Corp. issued its warning Wednesday, and semiconductor and telecommunications concern Motorola Inc. followed suit Thursday. However, unlike the previous two earnings warnings, which the companies blamed on problems associated with the Asian crisis, Compaq's problems are home-grown. The prediction for break-even results for the first quarter falls far below the Wall Street mean estimate for earnings of 35 cents a diluted share, according to a survey of 31 analysts by First Call. The First Call mean estimate for Compaq's second quarter is for earnings of 38 cents a share. The outlook is also far worse the year-earlier quarter, when Compaq posted a profit of $387 million, or 27 cents a share, on revenue of $4.81 billion. Year-ago per-share results were adjusted to reflect two stock splits. The PC seller said its outlook for the second quarter remains "cautious" as well, as market conditions remain competitive. Nonetheless, Compaq said it fully intends to expand its business and add market share in 1998. "We looked closely at our market and business plan once it became clear that sales out of our North American commercial channels were not meeting our expectations," said Eckhard Pfeiffer, Compaq's president and chief executive officer. "We are putting in place price reductions and aggressive promotions in the first and second quarter to reduce these channel inventories and accelerate the implementation of our Optimized Distribution Model." Compaq said it seeks to achieve channel inventories that support that distribution model by the end of the second quarter. The company said timing its pricing and promotional actions to coincide with the closing of its $9.6 billion acquisition of Digital Equipment Corp. (DEC) "will position us to take full advantage of that merger." After Intel's profit warning Wednesday, Wall Street analysts said it appeared the Santa Clara, Calif.-based company had been caught off guard by an unforeseen buildup in computer inventories. Aaron Goldberg, an analyst at market researcher Computer Intelligence Corp., said data show computer inventories at U.S. distributors rose significantly in October and again in January, the latest month for which data are available. Shares of Compaq (CPQ), which closed up 50 cents Friday at $27.625, were unavailable for after-hours trading after the announcement. Compaq's shares are about 20% off their mid-February level of $35, despite a rise in the overall market. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved. 5:35 PM