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

To: Yargnad who wrote (49005)	2/19/1999 8:26:00 PM
From: hlpinout	Read Replies (1) \| Respond to of 97611

NEC To Cut 15,000 Jobs Story Filed: Friday, February 19, 1999 03:04 PM EST TOKYO (AP) -- NEC Corp., Japan's biggest computer maker, will cut 15,000 jobs, or nearly 10 percent of its work force, over three years as it struggles to recover from slumping sales and massive losses at its Packard Bell unit in the United States. About 6,000 of the job cuts are outside Japan; the company did not say how many will hit its 7,000 U.S. workers. The downsizing, disclosed on Friday, was the latest corporate fallout from the spreading economic crisis in Asia. But NEC's woes also were tied to problems endemic to its U.S. unit, which has been hammered by price-cutting wars with U.S.-based makers of personal computers. NEC is one of the world's biggest technology companies, with products ranging from laptop computers to cellular phones to fiber optic networks. It expects to lose up to $1.25 billion this year amid the Asian slump, a prolonged recession in Japan and a rising yen, which pushes up the price of Japanese products sold abroad. To cope with the losses, NEC will slash executives' salaries by up to 20 percent, trim capital spending by a fifth, and cut its research and development budget by 10 percent. NEC will also sell real estate to pay off debt. Much of the damage flows from red ink outside Japan. The Packard Bell division, based in Sacramento, Calif., lost $500 million last year as its share of U.S. PC sales dropped to 7.1 percent from 9.4 percent in 1997, according to the Dataquest research firm. The drop was sparked by a rush of competitors to sell inexpensive PCs, a category Packard Bell traditionally has dominated. ''When they were in the marketplace a few years ago they were the leading brand in that market and there wasn't much competition,'' Dataquest analyst Charles Smulders said. ''Now, IBM, Compaq, Hewlett-Packard are all in that market.'' As part of the restructuring, NEC will separate the profitable European subsidiary of Packard Bell NEC from its loss-making U.S. division, putting the European unit under direct control of the NEC parent company. In addition, NEC president Hisashi Kaneko will step down, though he denied his resignation was an admission of responsibility for the poor performance. Koji Nishigaki, currently a managing director, will take over as president on March 26. NEC's loss, which comes to 150 billion yen, is far more than its previous forecast of a net loss of 35 billion yen, or $292 million. NEC earned 40.51 billion yen last year. NEC and its 130 subsidiaries employ 155,000 people worldwide. The company said Packard Bell NEC is expected to post an $80 million loss before taxes this fiscal year, but predicted the division will earn a profit in 2000. In other Asian fallout on Friday, Toshiba Corp. said a rising yen and a slump in sales hurt earnings. Toshiba said it expects a net loss of 20 billion yen, or $167 million, this year for its parent company, compared to an earlier estimate of a profit of 12 billion yen, or $100 million. The loss would be the first in 48 years for the parent company, which doesn't include Toshiba's subsidiaries.

To: Yargnad who wrote (49005)	2/19/1999 8:42:00 PM
From: Kenya AA	Read Replies (1) \| Respond to of 97611

Yarg: Well, I sure remember one insider sale! <ggg> I believe it was just prior to the December earnings release - how prescient! I don't know if the DELL money is flowing into CPQ at the moment - I think it's in cash. I think it will flow into CPQ once the correction/consolidation is over and some leaks on Q1 sales are out. You have to remember that we were at 42 when we knew Q4 was going to be great and CPQ was going to do "something" with AV - there really hasn't been any more substantial news since then to move the stock to 50 and keep it there. In fact, it's been about the opposite - sometimes I wonder if DELL is ever going to cease being a thorn in CPQ's side. If ain't one thing with DELL, it's another! <gggg> K