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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: JH who wrote (71929)	10/14/1998 10:45:00 AM
From: Boplicity	Read Replies (2) \| Respond to of 176387

Comments about CPQ earnings from Briefing.com COMPAQ (CPQ) 24 1/2. It appears that the Digital Equipment Corp. (DEC) acquisition hasn't helped much. Before the open Wednesday, computer maker Compaq (CPQ) reported third quarter earnings of $0.07 per share. That was a penny ahead of the expectations, but below the year-ago $0.36 per share profit. The key point here is that this is the first full quarter with the DEC acquisition in the numbers, and profits are still meager. Briefing.com has always taken a skeptical view of this combination of PC maker and slowing-dying-mini-computer company that was living off service contracts. CPQ has consistently said that the benefit of this combination was just around the corner. Now, the press report puts a positive spin on the situation saying that synergies were accomplished this quarter, and that more are expected next quarter. It had better be a lot more. The bottom line is that CPQ made just 7 cents and the stock trades at 24 1/2. That is a very high multiple. DEC wasn't making any money and CPQ wasn't making much. Together, they aren't making much. Trying to get synergies or cost benefits for this acquisition will be hard, and the market may soon start to demand performance now rather than in the next quarter.