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Compaq joins profit warning parade

Those pesky American consumers again

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Compaq, the world's biggest PC maker, is the latest tech firm to issue a profits warning. And once again (viz. Gateway, Apple, Intel, AMD, world+dog) it blames the lack of consumer buyers in America.

Big Q says it will undershoot previously announced sales targets by eight to ten per cent - it estimates it will now generates sales of $11.2-11.4 billion in Q4. Analysts polled by First Call reckon profits will now be 28-30 cents per share, compared with the previous consensus of 36 cents per share.

In a conference call, Compaq CEO Michael Capellas said that problems surfaced only in early December. "October looked good. In November we were still on track." Typically, December accounts for 45 per cent of Compaq's Q4 sales - as retail customers make their Christmas purchases.

So what's gone wrong this year? If it's computer saturation in American homes, then the PC makers and their component suppliers are in big trouble. But if it is, as some Reg readers suggest, a temporary case of retail FUD in the aftermath of a very messy election, then the Supreme Court annointment of Gush or Bore, will see America return to business as usual.

Compaq reckons it will get back on track next year, forecasting ten per cent higher revenues in 2001. With its corporate customers, big service busines and huge global footprint, Big Q remains better off than just about any PC maker. ®

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