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To: jim kelley who wrote (92016)	1/27/1999 10:18:00 PM
From: Hobie1Kenobe	Read Replies (2) \| Respond to of 176387

CBS Marketwatch has an article saying CPQ's earnings were really just 1 cent above expectations. I'm glad we don't have to worry about Mike acting like E.P. (der schlickmeister) when earnings time arrives. Right Kemble?

To: jim kelley who wrote (92016)	1/27/1999 11:01:00 PM
From: Mohan Marette	Respond to of 176387

CPQ's Virtual earnings & High A/R? Somebody pls call the factoring guys. Stop it Jim you are killing me over here.<lol> If CPQ investors are smart they should dump the dog and join the Dell train,now that is a company. ============================================== As a percentage of revenues: Their accounts receivable are up by 37% over last years Q4. Their inventories are up 10% over last year Q4. Their cash position is down 54% over last year Q4. Hence, if they had a problem last year it looks like they will have an even bigger problem this year as they move into Q1 and Q2. I can only guess why their accounts receivable is so huge. Their inventories are also very high relative to last year at this time. Perhaps this explains why the stock is headed south despite the pony. Maybe I was not really wrong about the earnings. The earnings they reported may be the virtual earning they reported last year.

To: jim kelley who wrote (92016)	1/27/1999 11:06:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Jim, those A/R are interesting, because they could represent sales into the channel, and we know what that means! I haven't analyzed the statement yet, but when I do that's one of the things I'll be looking at. TTFN, CTC

To: jim kelley who wrote (92016)	1/28/1999 12:17:00 AM
From: Chuzzlewit	Read Replies (1) \| Respond to of 176387

Re: Compaq earnings Jim, I couldn't help it. I took a wee peek at the earnings, and the smell wafted over me like old, unwashed socks! Here's what I found: Last year in this quarter the company had a gross margin on products of 27.5%. This year that margin was down to 21.9%!!!! What makes this doubly remarkable is that the company took a $3BB "in-process R&D" write-down. Now that's the kind of accounting trick that they use to hide future expenses. So, I believe that earnings may be significantly worse if properly accounted for (according to the way I account for these things). A look at cash and A/R tells me that something's rotten in the City of Houston. This is a pretty ugly looking statement in view of the fact that they are supposed to be doing more direct sales, which ought to be increasing their gross margins. Big question: how do they account for factored A/Rs? TTFN, CTC