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

To: rudedog who wrote (26157)	5/14/1998 5:16:00 PM
From: SC	Read Replies (1) \| Respond to of 97611

rudedog, see my previous post on what I saw in our local CompUSA store. Wasn't the inventory problem partially the result of not selling through in the first place? From another piece of news from IBM, it looks like Compaq's service oriented business will be very promising of its future and will be its advantage over others that don't have this business: investor.msn.com .... In his annual meeting with financial analysts, Gerstner said IBM was poised in coming years to break into double-digit revenue growth, powered by a surging computer services business which grew 28 percent last year on a constant-currency basis. Even if the unit's growth rates dropped to the mid-teens, Gerstner argued, the services business would eventually pull overall revenue growth at IBM to double-digit rates in the next few years, assuming growth rates at other units held steady. However, he added that he thought the services business could actually grow in excess of 20 percent for some time yet. "If you take the number I think might be possible for services," Gerstner went on, "the conclusion doesn't change, you just get there sooner." The idea that IBM's fast-growing services unit could spur faster overall growth was already in currency among analysts, but Gerstner's newfound willingness to address the topic head-on was viewed as especially encouraging. "The story about services is not a new one but this is the first time (Gerstner) has actually said it," said Gary Helmig, an analyst who covers IBM for SoundView Financial. "That's what's causing investors to want to believe." In contrast, H-P disclosed Wednesday that weakness in Asia, a bitter price war in personal computers and high expense levels would leave the company "well short of expectations" for its fiscal second quarter. "While we did achieve good revenue and order growth this quarter, we are disappointed that our early calculations show earnings per share coming in well short of expectations," H-P Chairman Platt said in a statement. Unlike IBM, H-P does not have a major services business to cushion it during hard times in hardware ...