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To: cirrus who wrote (2182)	5/14/1998 10:46:00 AM
From: santhosh mohan	Read Replies (1) \| Respond to of 4722

Yikes! More bad news???? Thursday May 14, 10:15 am Eastern Time Company Press Release Xerox Sues Hewlett-Packard Over Patent Infringement Suit Seeks Injunction, Claims HP Uses Xerox-Patented Technology in Printers STAMFORD, Conn.--(BUSINESS WIRE)--May 14, 1998-- Xerox Corporation today sued Hewlett-Packard Company [NYSE:HWP - news], seeking a permanent injunction prohibiting HP from manufacturing and selling certain thermal ink-jet printers and related supplies because they contain Xerox-patented technology. The suit, filed in U.S. District Court in Rochester, N.Y., focuses on technology developed by Xerox and deployed in the printhead cartridges of certain HP color ink-jet printers. ''Our intellectual property is among our most valuable assets,'' said Xerox President and Chief Operating Officer G. Richard Thoman. ''The Xerox group spent $1.7 billion in research and development in 1997 alone and was awarded almost 800 patents. When we find unauthorized use of our patented technology, we have to move accordingly to protect our shareholders' investment. We just will not let others misappropriate our intellectual property. ''This lawsuit represents an intensified effort to protect our intellectual capital,'' Thoman said. ''This isn't the first time we've sued to protect this investment and it certainly won't be the last.'' The Xerox suit seeks unspecified damages from HP.

To: cirrus who wrote (2182)	5/14/1998 11:34:00 AM
From: nealm	Read Replies (2) \| Respond to of 4722

In terms of "pre-announcing", I don't see the difference between announcing yesterday after the close and monday morning. I thought they were going to do well since they hadn't "pre-announced". Unless the price recovers (mid 70s?) I see lawsuits on the horizon. How is it that accounts waited till the last minute pulled an all nighter and suddenly discovered a short fall? I still don't understand the .07 charge. Maybe tommorrow's report will explain better. Neal

To: cirrus who wrote (2182)	5/14/1998 4:07:00 PM
From: BelowTheCrowd	Read Replies (1) \| Respond to of 4722

Tom, Several issues combined into the missed quarter. First, the discounting of PCs. While the discounting was known, it was not necessarily clear how this would impact the bottom line. Remember that costs fluctuate too, and many components (processors, disk drives, memory) have gotten dramatically cheaper too. HPs distributed management tends to make it difficult to see exactly what the impact is until a lot of numbers are pulled together. Second, Falloff in Asia. Much of this was not even PC related. In instruments in particular the sales and delivery cycles can be very long. And many deals are closed in the last weeks of the quarter, so guessing ahead is often very hard to do. Third, HP's general culture. We give divisions and geographies a HUGE degree of independence in their operations. Which makes them able to respond quickly to particular market demands, but makes it very difficult for anybody to see the big picture at the company level. From top management's point of view, there were probably a lot of plusses and a lot of minuses visible, but no conclusive picture of how they would balance out in the end. That usually doesn't happen until end of quarter. Just my own opinions, based on public information, and don't reflect the opinions of my employer. mg