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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: MikeM54321 who wrote (4412)	6/11/1998 10:19:00 PM
From: MikeM54321	Read Replies (1) \| Respond to of 9980

Re: Asia Warnings This is the biggest one to date! Funny they didn't mention a direct correlation to Asia, but I would have to believe it's related. They claim it's only "transisition" costs. But it was so important I'm posting it anyway. It is one of the most poorly written warnings yet. You have to read it again and again to make sense out of it. MikeM(From Florida) PS. Had a fantastic Seafood(rare for me to eat seafood)dinner out on the beach. "Keegan's" on Indian Rocks Beach. Try it if you are ever down in Florida. It's not a tourist trap. Only locals eat there. ************************************** INTERVIEW- COMPAQ CPQ CFO SEES CUTS BEYOND DEC By Eric Auchard NEW YORK, June 11 (Reuters) - Compaq Computer Corp.'s acquisition of Digital Equipment Corp. will weigh down the combined company's earnings for the remainder of the year, Compaq CFO Earl Mason said in an interview late on Thursday. Not until the fourth quarter can the massive costs of integrating Digital into the combined company be put behind Compaq and the merger act as a booster to earnings, he said. Mason made the comments after a meeting late on Thursday with Wall Street analysts in which he and other top Compaq executives spelled out the near-term costs and expected increased earnings power for the top personal computer maker. "I told (analysts at the meeting) that, 'Victory in Q4 is a penny over whatever the First Call estimate is now,'" Mason told Reuters, referring to the 37 cent per share estimate that was the fourth quarter consensus among analysts. The company's per share earnings were 42 cents in the fourth quarter of 1997. Although the positive affect on combined earnings would be only minimal during 1998, significant, merger-related earnings gains will be visible by the first quarter of 1999, he added. Mason characterised the third quarter of 1998 as "very much a transitional one" in which few of the synergistic benefits of the merger would yet to be realised. In addition, Mason said Compaq will cut another 2,000 in existing businesses on top of the 15,000 staff it plans to cut at Digital Equipment. It was the first time a Compaq official had confirmed reports that 15,000 of Digital's 54,000 jobs will be eliminated. He said the cuts were likely to target the overlap between the finance organisations of Compaq, Digital, and Tandem, another company which Compaq acquired last year. He noted that Compaq, a company with $22 billion in 1997 revenues, has 800 finance staff worldwide. Digital, with around $13 billion in revenues, had another 1,900 in finance, while Tandem, with $2 billion in revenues, has 450 employees in finance functions. "We can probably run the whole business with around 2,000," Mason said. The additional 2,000 job cuts will lead to further restructuring charges in the second quarter beyond the billions in dolla s of charges for the Digital acquisition, he said. In a May 6 regulatory filing, Compaq said it would write-off $3.4 billion of the $8 billion price of acquiring Digital to cover research costs that have no value to Compaq. In addition, the filing said Houston-based Compaq planned to take from $1.5 to $2.0 billion to cover restructuring costs that would include the 15,000 Digital Equipment staff. Digital's shareholders ratified the acquisition plan earlier on Thursday and Compaq shortly afterward closed the $8 billion acquisition, which ranks as the largest ever in the computer industry measured in terms of the value of the deal. Measured by revenues, the combined Compaq's nearly $38 billion in revenues ranks it closely behind Hewlett-Packard Co. HWP as the third largest information technology company in the world. Still, International Business Machines Corp. IBM dwarfed both companies with $78.5 billion in 1997 revenues.

To: MikeM54321 who wrote (4412)	6/11/1998 10:29:00 PM
From: MikeM54321	Respond to of 9980

Re: Asia Warnings Speaks for itself. They are dropping like flies now. This is getting uglier and uglier. Taiwan as most know, was supposed to be a stalwart against the crisis. Only lately have they begun to have problems. Here's a fallout from it. ******************************************** ASM sees weaker earnings ahead By Binti T. Harvey, CBS MarketWatch Shares of ASM Lithography Inc. (ASMLF) is poised to fall Friday after the chip-equipment manufacturer said it expects fiscal 1998 earnings to fall below fiscal 1997 results. The company attributed the weak results to overall softness in the capital equipment market and order reductions by Taiwanese customers 1997, ASM earned $1.08 a share, and analysts expected approximately $1.52 in fiscal 1998. Last week, CIBC Oppenheimer downgraded the shares to "buy" from "strong buy." Shares closed down 2 15/16 at 34 5/16 ahead of the news.