Compaq's third quarter profits have beaten expectations, despite falling 78 per cent to $115 million. Sales were up 36 per cent on the previous year's Q3, to $8.8 billion, and CEO Eckhard Pfeiffer says that integration of Compaq and Digital operations was on track during the quarter. Compaq also managed to improve gross margins to 24.9 per cent, and says its distribution channel sales growth was at 38 per cent approximately twice that of the market in general. The company expects Q4 to see further progress as more and more of the "synergies" from the Digital merger kick-in. ® Click for more stories