Compaq Lowers Q4 Expectations Of Sales, Profits

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HOUSTON -Lining up alongside its sister computer makers in announcing sales shortfalls in recent weeks, Compaq Computer Corp. reported last week that revenue and earnings for its fourth quarter ending Dec. 31 would be below market expectations.

Compaq said fourth-quarter revenue would be 8-10 percent below expectations, coming in between $11.2 billion and $11.4 billion. These figures still remain about 7 percent above the same quarter in 1999.

"We ended the third quarter with positive market momentum in virtually all of our business segments," said chairman/CEO Michael Capellas (see story, p. 117). "While we had a good start in the fourth quarter, it is now clear that market confidence has wavered and that we will be affected by the general softness in the U.S. consumer, small and medium business and dot-com markets."

Compaq's announcement follows on the heels of similar reports of sales shortfalls from computer makers Apple, Gateway and Micron Electronics. Chip makers Intel and Advance Micro Devices have reported similar financial stress in recent weeks.

Yet, Capellas said, "the outlook for 2001 remains positive, although we expect the second half of the year to be stronger than the first half. Our current 2001 plan calls for 10 percent revenue growth."


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