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

To: rudedog who wrote (42895)	1/10/1999 5:02:00 PM
From: jim kelley	Read Replies (1) \| Respond to of 97611

Dpog, I am not talking about revenue. I am talking about cost structure and channel stuffing. We already have Radioshack reporting channel congestion. Now we have too many CPU's being shipped this quarter to make any sense of the 1998 worldwide market estimates. ASP's have dropped sharply in the retail arena. Promotional bonuses have to be paid as well. It looks like this quarter is going to be unit marketshare at any cost. We will find out soon. I do not think they have the magic to pull this one off!

To: rudedog who wrote (42895)	1/10/1999 7:24:00 PM
From: Gabriel008	Read Replies (2) \| Respond to of 97611

Rudedog, I subscribe to IDC and for a hefty fee receive PC sales data on a quarterly basis. I will receive Q4 data Jan 23 a few days before CPQ reports. Based on my calculations CPQ needs to achieve approximately 25% sequential revenue growth this quarter in order to generate $0.36 eps. Assuming the same ASP as Q3 this requires CPQ to generate 25% sequential unit growth as well.These estimates are based on 26% gross profit and the same operating expenses as Q3. I'm concerned that the required sales growth is too great to achieve without some form of channel stuffing. Certainly, stuffing would irreparably damage CPQ's image and credibility and I can't logically see CPQ management reverting to this in order to make their numbers. Do you have an hard data, outside the sales numbers, that would suggest that CPQ has made their earnings numbers for Q4? Best regards, Gabriel