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

To: jim kelley who wrote (40851)	12/22/1998 8:52:00 PM
From: Jeng Chiu	Read Replies (1) \| Respond to of 97611

Jim, one of your assumptions is that CPQ's service business to be flat sequentially. That is very debatable. Gross margins should also improve with lower component costs and therefore contribute to overall earnings. You're assuming a 13% increase in revenues sequentially based on the year before. Yet, you stress the increased advertising without making the proportionate increase in revenues. Finally, this should be the 1st quarter which DEC should provide more accretive earnings to CPQ's bottom line. Right now it's difficult to quantify exactly how much revenue they will be able to provide. We'll find out in January