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

To: Steven N who wrote (59514)	4/22/1999 9:02:00 PM
From: Loki	Read Replies (1) \| Respond to of 97611

Steven N...I've been trying to get a more complete answer. 1. Price reductions... If products were sold at cost (or close to cost) it would reduce revenues somewhat but might erode earnings completely. With a ratio as 5% to 50%, it might indicate that volume went up, higher than estimated. (common to corporations in "price wars") Sacrifice profits to maintain market share and revenues. 2. I do not believe that the margin compression was due to lack of economies of scale. 3. Channel returns...credits Net profits and revenues do not move in equal %'s. A. Look at absolute numbers as well. B. The 5% and 50% are numbers that relate to estimates (how accurate were those starting points?) Loki PS...I have seen no numbers or heard company explanations.