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

To: James F. Hopkins who wrote (21600)	3/12/1998 4:36:00 PM
From: Tom Gebing	Read Replies (2) \| Respond to of 97611

To All - Compaq Computer Corp. said on Thursday it planned to outline a new worldwide strategy for selling computers to small- and medium-sized businesses next week at Germany's CeBIT computer trade fair. zdnet.com

To: James F. Hopkins who wrote (21600)	3/12/1998 6:16:00 PM
From: van wang	Read Replies (1) \| Respond to of 97611

unlike CPQ, I having pricing discipline...the mkt always gives me another chance Monday March 9, 7:17 pm Eastern Time FOCUS - PC stocks tumble on price war worries-analysts (Recasts, updates stock prices) By Richard Melville NEW YORK, March 9 (Reuters) - Personal computer stocks tumbled on Monday as Wall Street braced for a PC price war. With sub-$1,000 machines the hottest sellers in the consumer market, PC makers appear to be using the same price-cutting tactics in the lucrative corporate market. Stiff price competition prompted a warning Friday from Compaq Computer Corp., the world's leading PC maker, that it would break even in the first quarter -- not post a profit as investors on Wall Street had expected. Analysts said Compaq has signalled a willingness to sacrifice profits in the short run to try to take business from competitors, especially Dell Computer Corp. ''The bottom line right now is Compaq has nothing to lose,'' said BancAmerica Robertson Stephens analyst Dan Niles. ''All you had to do was listen to their conference call (Friday) to know they've taken aim at Dell.'' Similar tactics helped big PC makers squeeze out smaller suppliers in 1997. But now, with the smaller players gone, the battle will pit market leaders against one another. ''The top-tier players are now turning more against each other and throwing some of their price discipline to the winds,'' J.P. Morgan analyst Daniel Kunstler said in a note Monday. Compaq stock tumbled $2.44 to $25.25 on the New York Stock Exchange and dragged other PC makers down with it. Dell lost $4.25 to $64 on Nasdaq and Gateway 2000 dipped $1.44 to $36.31 on the NYSE. IBM lost $2.19 to $96.19 and Hewlett-Packard fell $1.31 to $60.25. In its warning, issued after the market closed on Friday, Compaq cited sluggish sales to corporate customers in North America. Analysts who cut profit forecasts for Compaq on Monday also trimmed estimates for Dell, a sign the two companies -- which are more focused on PCs and PC servers than competitors IBM and Hewlett-Packard Co. -- face more risk from a price war. Dell and Compaq have also waged a protracted battle for leadership in the corporate desktop computer market. A Dell spokesman said the company tends to focus on higher-priced, custom-tailored machines that consumers and businesses order directly, adding that its prices were often higher than the rest of the industry. The latest round of price-cutting is thought to have started with a company whose share of the PC market had been slipping, International Business Machines Corp. IBM is planning a $799 desktop system for the corporate market built around an Intel Corp. [Nasdaq:INTC - news] chip. At that price, the machine would be comparable to the cheapest systems aimed at consumers. The Intel chip is a switch, because the least-expensive machines usually include chips from Advanced Micro Devices Inc. [NYSE:AMD - news] or National Semiconductor Corp [NYSE:NSM - news]. Analysts said IBM may be taking advantage of its profit warning in January, when it said unusual factors such as marketing expenses related to the Nagano Olympic games would keep it from meeting earnings estimates in the first quarter. That warning, like Compaq's, may have freed IBM to sacrifice near-term profits for market share gains, analysts said.

To: James F. Hopkins who wrote (21600)	3/12/1998 6:24:00 PM
From: van wang	Read Replies (2) \| Respond to of 97611

everyone is feeling it (UPDATE) Hewlett-Packard Chief Blames Bloated PC Inventories On Compaq, IBM 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. Companies or Securities discussed in this article: Symbol Name NYSE:CPQ Compaq Computer Corp NYSE:HWP Hewlett Packard Co NYSE:IBM Intl Business Machines Corp c 1998 Quote.com, Inc. All Rights Reserved.