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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: TigerPaw who wrote (119602)	4/21/1999 3:15:00 PM
From: TechMkt	Respond to of 176387

It doesn't seem to be getting any better at CPQ. Even worse, they still don't know WHY their earnings were so low. Fez ___________________________ Wednesday April 21, 2:16 pm Eastern Time Compaq says Q1 unacceptable but is mum on outlook By Eric Auchard NEW YORK, April 21 (Reuters) - Officials of Compaq Computer Corp. (CPQ - news), the world's No. 1 personal computer maker, said on Wednesday that first-quarter results were unacceptable but provided little guidance on when its business might recover, according to analysts who participated in a conference call with the officials. Executives of the Houston company said sales were hurt not only by slack demand for its business PCs but by shortfalls in its large corporate computer businesses. The call with analysts and investors came after the company reported a first-quarter profit of $281 million -- in line with the sharply reduced outlook Compaq recently disclosed. But when pressed to explain how a 5 percent shortfall in revenues had led to a nearly 50 percent shortfall in earnings, the officials said they were still sorting through financial data to identify the causes. ''While the company's new management is being extremely guarded in its comments, the shortfall appears to be the result of a combination of factors,'' Cody Acree, a Southeast Securities analyst, wrote in a note to clients after the conference call. The news media was barred from participating in the conference call by the company, which cited corporate tradition. Later, after Compaq's stock had begun trading, Compaq held a separate call for reporters. A Compaq spokesman confirmed that the company's first-quarter financial shortfall extended to both its Digital Equipment and Tandem operations, two companies acquired in recent years. He said officials had not specified what percentage of the lower results were tied to these businesses. Compaq ended the first quarter with 69,200 employees, a net decrease of 1,400 from the fourth quarter, he said. This level puts it 85 percent of the way toward meeting the goal it set last June of 17,000 net job reductions as it cuts costs and integrates its $8.4 billion Digital Equipment merger and Tandem acquisition. In a bid to shore up support among customers, shareholders and employees, the company took out advertisements in major U.S. newspapers Wednesday pledging renewed dedication to ''anticipating and exceeding the needs of the market.'' On a positive note, Compaq officials boasted to analysts that PC sales to consumers -- as opposed to business customers -- rose 30 percent, both for deliveries from Compaq factories to wholesale distributors and from retailers to consumers. The company expects to hold its leading market position in its commercial PC business, based on industry market research estimates for shipments during the first quarter, analysts said. Compaq officials said personal computer-based servers, which are used to manage networks of other computers, rose 35 percent during the first-quarter, measured in terms of units shipped from distributors to corporate customers, the analysts said. Later, in the conference call for reporters, a Compaq official reiterated that the company was aware of no reason to restate its previously reported financial results in the wake of the departure of two top executives last weekend. On Sunday, the company announced the resignations of Chief Executive Eckhard Pfeiffer and Chief Financial Officer Earl Mason and named a three-man office of the chief executive, including Chairman Ben Rosen. It also named a new CFO. In early afternoon trading Wednesday, Compaq stock stood at $23.75, down 25 cents, in composite U.S. stock market activity. The shares have fallen more than 50 percent from their highs in January, before optimism began to deteriorate.