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Technology Stocks : HWP -- Hewlett Packard -- Ignore unavailable to you. Want to Upgrade?

To: DWW II who wrote (1923)	3/12/1998 7:37:00 PM
From: Uncle Frank	Read Replies (1) \| Respond to of 4722

Expanded coverage of Lew Platts comments at Internet World: Dow Jones Online News, Thursday, March 12, 1998 at 12:22 (Published on Wednesday, March 11, 1998 at 12:12) NEW YORK -(Dow Jones)- Soon after Wall Street digested a batch of earnings warnings from other technology heavyweights, Hewlett-Packard Co.'s chief executive officer Wednesday predicted pricing pressures and bloated inventories in the middle and high ends of the personal computer market will persist for several months. Speaking at the Internet World trade show in Los Angeles, H-P CEO, President and Chairman Lewis Platt, said there are too many PCs in the industry's distribution channel. "It's fair to say the PC market has probably been better at times than it is right now" Platt said. "There is no question that there is too much inventory in the channel." Earlier this week, investors were on edge after Compaq Computer Corp., Intel Corp. and Motorola Inc. warned the current quarter's results will be disappointing. The warnings have caused concern about pricing pressures and bloated inventories. In some cases, the warnings have also prompted debate over whether the troubles are related to demand. Motorola also cited the Asian economic turmoil. Platt blamed the industry's problems on H-P's competitors, namely Compaq, and, to a lesser extent, International Business Machines Corp. He said H-P has tightly controlled its inventories and has just enough product on hand to meet its customers' demands. However, he acknowledged that H-P will be forced to meet price discounts and rebates that Compaq and others plan to offer in an effort to clear out inventories. There is no doubt the pricing pressure that roiled the low end of the PC market will hit the middle and high end of the market, Platt said, an area where H-P specializes and where profits are greatest. "I think you're going to see it will probably have a modest impact on (Hewlett-Packard's) PC margins," Platt said. "Fortunately, it's not our only business." H-P, regarded by many as one of the most conservative companies in the technology industry, and IBM are the only technology companies whose stocks are used in the formula used to calculate the famed Dow Jones Industrial Average. More than the other companies' warnings, Compaq's stunning first-quarter forecast heightened concern on Wall Street that the pricing pressure that already consumed desktop PCs has reached the market for lucrative server machines. Compaq, the world's largest supplier of PCs, last week said it expects to break even in the first quarter rather than post a profit estimated to exceed $500 million. Sales are expected to be flat. Copyright (c) 1998 Dow Jones & Company, Inc. All Rights Reserved.