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To: Tony Viola who wrote (78441)	4/11/1999 1:48:00 PM
From: Scumbria	Read Replies (4) \| Respond to of 186894

Tony, Compaq specifically said that their shortfall was due to their commercial PC business, which is 100% Intel based. ''The quarter's shortfall reflects lower-than-anticipated market demand and increased competitive pricing in the commercial PC sector,'' Chief Financial Officer Earl Mason said in the statement. dailynews.yahoo.com If anything, this will push them towards alternate suppliers. Compaq and most other OEMs are not happy about the fact that Intel gets most of the profit out of each box. That is one reason why they are always looking for lower cost CPUs. Scumbria

To: Tony Viola who wrote (78441)	4/11/1999 2:10:00 PM
From: VICTORIA GATE, MD	Respond to of 186894

Tony Viola re<What I think is that their top *sht management suffers from egomania and is out of touch with reality wrt their best (only) all around source of CPU chips.> I try not to make you upset but pls read this : On March 22, 1999, 2:50 p.m. PT <Compaq spokesman Jim Finlaw declined to comment, saying the company was in its "quiet period" ahead of the end of quarter.** =-=-=-=-=-=-=-=-=-=-=-==- Sales concerns may slow Compaq By Reuters Special to CNET News.com March 22, 1999, 2:50 p.m. PT Compaq Computer, the No. 1 maker of personal computers, will need a sales surge in the final days of March to meet Wall Street earnings forecasts, a brokerage analyst said today. In addition, Donaldson, Lufkin & Jenrette analyst Kevin McCarthy said there was more evidence of weak demand throughout the PC industry, leading him to cut his estimate for 1999 shipments and warn that the likelihood of earnings disappointments this year had grown. McCarthy said in a research note that pressure on computer hardware stocks had mounted in the past few trading days amid speculation that Compaq would "pre-announce" that its earnings in the three months ending March 31 would not meet Wall Street's current estimate of 32 cents a share. Compaq spokesman Jim Finlaw declined to comment, saying the company was in its "quiet period" ahead of the end of quarter. The company plans to report first-quarter earnings in mid-April. In late February, Compaq warned analysts that commercial PC sales had been weak in the first six weeks of the quarter, putting pressure on the PC maker to make up the difference with strong sales during the final six weeks of the quarter. "At this point, a pre-announcement is too close to call," McCarthy said, using Wall Street's jargon for when a company issues a press release saying it will fail to meet Wall Street's quarterly expectations for revenues, earnings, or both. Analysts' consensus on Compaq's first-quarter earnings is 32 cents per share, according to First Call, which tracks brokerage estimates. McCarthy said he had cut his industrywide forecast for growth in PC shipments for the first quarter to 12 percent from 18 percent, and for the second quarter to 15 percent from 18 percent. "The jury is still out on whether soft demand experienced during the March quarter is simply a pronounced seasonal effect or the beginning of a more sustained slowdown," he said, adding that, "We do believe that 1999 will be a slower unit growth year than 1998." McCarthy concluded that computer industry stock price-to-earnings ratios--a key measure of stock valuations-"will need to compress further to reflect...a greater chance of earnings disappointments associated with a slower unit-growth environment," he said. In Compaq's case, PC shipment rates would have to increase by an estimated 50 percent in March compared with February, for Compaq to meet Wall Street expectations, he said. Besides a March surge in overall PC shipments, Compaq also is dependent on closing several large deals for Digital servers by the end of next week, the analyst said. news.com