Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: craig crawford who wrote (9963)	6/12/1998 9:17:00 AM
From: Lazlo Pierce	Respond to of 18691

Craig, First I did say the report at that time was ambiguous. Next, CPQ said Q3 will be "transitional", which also means not a good Q. This is new news, as they had said before Q2 should be the last of the transitional Qs. Next, the market is edgy, and it was conceivable that if they decided to take CPQ down the others might take a hit too. I also said "company specific", just depends on how edgy the entire market is. Is that explanation OK? I didn't say it WAS gonna happen this way, just a possibility. {edit} Just found this from briefing.com this am, basically says the same exact thing.<<Brief: Compaq's CFO announced that he expects company to breakeven in Q2 and that Q3 will be a "transitional quarter."... Sounds like another quarter of lousy earnings... Street had been expecting CPQ to post a gain of $0.01 in Q2... Year-ago the company gained $0.33... Co. also noted that it expects DEC merger to be accretive in Q4... First of the big companies to warn (not including Motorola, which makes a quarterly habit of the practice)... Stock is likely to come under modest selling pressure in early trading today... Rest of PC stocks to follow suit... >> Dave

To: craig crawford who wrote (9963)	6/12/1998 9:33:00 AM
From: Oeconomicus	Respond to of 18691

Explain to me what CPQ said that was so negative, and then explain to me why DELL should go down because of it. Craig, regarding the first part of your question, I'll grant that what they said was no surprise (except for the larger than expected "charges"), but only breaking even on operations (before "charges") for two quarters in a row can hardly be described as positive. They made about 31 cents per Q on average for the last three Qs of last year, so even if they managed to instantaneously return to those levels for the second half (doubtful), they'd still have only 62 cents for the year (which, BTW, is about 10% less than the consensus suggesting possible est cuts). As for Dell, they may well be immune to the problems other box makers experience. Whether it will effect Dell's stock price, I'll defer to you on that. Regards, Bob