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

To: hlpinout who wrote (58147)	4/16/1999 8:46:00 AM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

Prudential Update 4/15 EQUITY RESEARCH COMPAQ COMPUTER APRIL 15, 1999 -------------------------------------------------------------------------------- CPQ: HIGHLIGHTS FROM INNOVATE '99 AND ANALYST MEETING Subject: Compaq Computer (CPQ-$23 11/16)--NYSE COMPUT COM EPS OPINION Current: STRONG BUYAnalysts: Kimberly Alexy (212) 778-1049 Prior: Ellen Chae (212) 778-1751 Risk: HIGH 12-Month Target Price: $49.00--------------------------------------------------------------------------------Ind. Div.: $0.01 Yield: 0.20% Shares: 1,675 mil. 52-Wk.Range: 51-22--------------------------------------------------------------------------------EPS FY Year P/E 1Q 2Q 3Q 4Q Actual 12/98 $ 0.47 $0.01 $0.02 $0.07 $0.38 Current 12/99 $ 1.40E 17.2X $0.15E $0.34E $0.39E $0.51E Current 12/00 $ 1.95E 12.3X --------------------------------------------------------------------------------o On April 13-14, we attended Compaq's Innovate '99 Forum in Houston, Texas - a large annual forum for global customers designed to showcase company products and discuss new technologies and strategies. o During the keynote address, CEO Eckhart Pfeiffer introduced a new strategic initiative for the company called "Non-Stop eBusiness Solutions." Through this initiative, Compaq is striving to become a strategic partner with its customers, rather than purely a hardware supplier, by providing network integration, operations management, and IT infrastructure. o Yesterday, we attended a related Compaq investor/analyst meeting at Innovate hosted by Eckhart Pfeiffer and Earl Mason, the company's CEO and CFO, respectively. At the meeting, Compaq was more candid than usual, providing additional insight into the quarter's miss. o Management noted that of the $600MM top-line miss vs. original expectations of $10B, 50% was due to industry pressures, while the remainder was company-specific. o We believe that with the broader macro demand improving, pricing pressures should alleviate from the very aggressive Q1 levels. We expect earnings expectations to be more formally re-calibrated after next week's conference call (on 4/21), but believe the shares remain attractively valued at current levels. Potential catalysts include improved visibility into Q2 demand and pricing trends, which we expect will improve Posted: 04/16/99, 8:31AM EDT as a reply to: Msg 68903 by dogtrainer_99 Related Links Quote Profile Research Insider Go to: Start \| Most Recent \| Msg #:

To: hlpinout who wrote (58147)	4/16/1999 8:54:00 AM
From: rupert1	Read Replies (2) \| Respond to of 97611

Hiya hio: Thanks for the postings. The interview with EP was illuminating: first time he admitted the company is deficient in having a clearly understood focus; also admits he has done badly by shareholders this year. Didn't admit anything else though and came out fighting. Sounded positive about 15 cents being the minimum, but he, himself does not know what the industry figures are or how we stand on market share. The clear hint he gave is that it will be supportive of his analysis. He is being a little hard on himself taking $10 billion as the standard he was supposed to meet. That had been reduced in February by Mason to $9.75 billion and earnings of 32cents. He fell short on revenues by 3% and earnings by more than 50%. However, he is directing the analysis away from channel-stuffing and all that nonsense to the larger issues. Considering that he did not have a script fom me and considering that he had to use Babblefish to get his thoughts together in English, he did not do so badly. Whatever happens to the share price today, I'm feeling good about COMPAQ the company ( as a concept to be executed).