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

To: Lynn who wrote (55154)	3/30/1999 8:01:00 AM
From: rupert1	Respond to of 97611

Lynn: We have started to hear that some analysts/commentators don't think CPQ will warn - which is advance on last week. Apart from Bear Sterns, who said their analysis might be too optimistic - too "aggressive" - and Kumar, who said something similar when he predicted eps of 20 cents, most of the others can be read as being "conservative". This is based on their corollary statements that they were having to revise downward because of "uncertainty" or because earnings were "not visible" given the back-end loaded quarter. The rise in direct sales to $2 million a day i.e. $180 million for the quarter(assuming it was a constant average for the quarter) is a proportionate rise in only about 2% of expected sales, and we don't know how much of this increase in direct was a net increase overall. This is not significant enough to influence analysts, although every little helps. The depression in the share price is not surprising in view of the constant bombardment of negative or cautionary words issued by CNBC other media and analysts (and people on this thread). The only cure is a positive earnings surprise.

To: Lynn who wrote (55154)	3/30/1999 8:02:00 AM
From: Aitch	Read Replies (1) \| Respond to of 97611

Hi Lynn & victor, I attach some excerpts from a Montgomery report which centered around the "PartnerDirect" announcement yesterday. The report was written after the conference call. It mainly rehashes comments and quotes already posted on this board regarding the intent of PartnerDirect to: (a) Provide a more distributor-friendly program, (b) Introduce the SMB-targeted Prosignia line to the retail channel and (c) highlight the new low-end notebook line. Here are the important points IMO: "...Most importantly, PartnerDirect is an endorsement of the role of IM ($19 1/2, BUY) and TECD* ($19 1/8, BUY), the leading wholesale distributors. PartnerDirect is something of a reversal from the program announced last November..." "...PartnerDirect should support continued SMB share gains by Compaq, but we assume for now the incremental sales volumes won't be material to estimates. We think the expanded distribution and product and service offerings announced today should allow Compaq to continue growing its share in SMB..." "...Maintain BUY on Compaq. Consistent with Compaq's historic seasonal pattern, we expect CPQ shares to regain lost ground after the first quarter is history and investor focus shifts to the longer-term story. We continue to be encouraged by data points from the supply chain and channel, suggesting CPQ's 1Q results could be better than the market currently anticipates. (EPS above the mid-$0.20 range would likely be viewed as positive by the market; our estimate is $0.33.) Quarter-end buy-ins being offered by Compaq to distributors appear conservative relative to many prior quarters, such that the chances appear minimal that we'll see the revenue and margin dislocations that have in the past accompanied heavy channel stuffing..."