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

To: rupert1 who wrote (48704)	2/18/1999 10:12:00 AM
From: Elwood P. Dowd	Read Replies (4) \| Respond to of 97611

30s HERE WE COME!!! This is being posted on Aol... by: axlr_8 55173 of 55191 Any of you number crunchers want to see if this is true...It's being posted on the Aol boards... CPQ's Earnings Report Inventories up $.5 Billion over last year Q4. Cash position down 54% over last year Q4. ................... CPQQ498.. CPQQ497. Ret. on Inv. Cap. 13.8.... . 18.8..... (Income taxed at 30%) Ret. on Assets 17.9..... 22.2...... During last yrs. channel stuffing debacle the accounts receivables percentage of revenues was a whopping 39%. This caused 2 qtrs of no earnings to correct the situation. This last report..(hold on to your hats) A/R % of Rev.......64% (up $4.107 billion dollars yr./yr.) 64 PERCENT...this may take 3 quarters to work off. They stuffed the channel with enterprise workstation product. What to expect? History shows us product returns, writing off receivables to resellers at a discount, ie, voodoo accounting. Reality is lower eps, revenues, margins. All of this AND higher inventories to boot. Possible scenario, 2 horrible quarters ahead. With cpq stock 10/97 at 36 to the present 41, institutional managers would have made a better return in a checking account. These multi-billion dollars purchases are just masking a rapidly deteriorating core business, and compounding it, all under the blanket dream accounting term of "restructuring costs." Look for Eckard's next big contract negotiation to be his severance package. Amelio will be proud of his accomplishments. I currently have no position either way.