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Big Q's PC biz back on track

Alarum bells stop ringing in Capellas' nut

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The Compaq Computer Corp, which doesn't like to be referred to as the Big Q any more, has managed to turn round its PC business and post a tidy little profit for its second quarter.

The firm posted revenues of $10.1 billion and a net profit of $387 million for the Q, compared to a loss in the same quarter last year of $184 million.

CEO Michael Capellas said that Compaq is continuing to trim its operating expenses and said that its PC business, the core of the pre-Tandem, pre-Digital firm, has returned to profitability, with sales of servers and commercial desktops contributing to the turnaround.

This bit straight from Q's press release: "Nowhere are the results of our efforts more evident than in our Industry Standard Server and Commercial PC businesses. Industry Standard Server revenue grew by 40 per cent, further extending our leadership in building out the Internet infrastructure, while our Commercial PC business returned to profitability a quarter ahead of plan," Capellas said.

Capellas said the server platform formerly known as Wildfire had caused a decrease of revenues in its business server group because of the change. But, he added, demand for the GS servers - formerly known as Wildfire - remains high and will allow "double digit revenue growth" in the rest of this year.

The snowy high-end former Tandem server Himalaya platform continued to deliver good revenues, he said.

A look at the different geographies reveals interesting pointers to Compaq's future direction. The US only grew ten per cent, Asia Pacific grew 12 per cent, Japan grew by a staggering 40 per cent, and mainland China by 16 per cent. The European geography, which includes the Middle East and some countries in Africa, fell by four per cent.

Compaq has the edge over its arch-enemy Dell in China, largely due to its manufacturing model. Although Dell would dearly love a big fat chunk of the Chinese market, so far its share remains small there, because of its build-to-order methods. ®

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