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

To: my2centz who wrote (54199)	3/19/1999 7:52:00 PM
From: rupert1	Respond to of 97611

my2centz: Thanks for your two cents. rudedog has pointed out that 0.7 billion is available for further tax credits: i'm not sure you can assume that revenues will increase sequentially; that is not the norm as between 4Q and 1Q: the IDC figures refer to complete year on complete year; your 1Q 1998 to 1Q 1999 comparisons are probably skewed by the abnormally low revenues in 1998 due to inventory overhang: it should be a higher percentage increase. unit growth trends are apparently greater in the higher margin hardware and in services, so perhaps the percentage revenues from these should be higher: CPQ has stated that costs are being progressively reduced (and there have been more lay-offs since 4Q); I would be interested in your take on the Brazil Real devaluation issue. According to CSFB, Mason, CFO, said that up to $200 million has been lost on the value of "receivables" due to currency devaluation which was not hedged. I can't figure out if that is a hole in CPQ's 1Q revenues targets, are a one-time charge relating to receivables from 4Q sales. If the first, then it is relevant to your revenue heavy argument: if the second, it will not impact the eps - after charges. Apparently, Mason put a figure of 2 cents on this devaluation charge.