Compaq has let everyone know that its Q3, ended September 30, was an absolute dog, with sales and profits both dragged down in the aftermath of September 11.

The company now expects sales to come in at $7.4bn to $7.5bn, 12 per cent down on Q2, worse than previously expected. And it's on course for an operating loss of 0.5 to 0.7 cents per share when it announces its complete set of results in a couple of weeks or so. Big Q is also taking a non-cash charge of $500m in the quarter, after writing down some investments (but mostly CMGI).

Compaq blames the size of the sales fall from Q2 to Q3 on the "increased speed of economic deterioration exacerbated by the tragedy of September 11 and other related supply chain and logistics events".

This "disproportionately affected the current quarter—market demand slowed and transportation and logistics were disrupted".

Michael Capellas, Compaq chairman and CEO, says the company is making "great progress" in cost controls, which will benefit the firm in the long term. In the medium term, if all goes to plan, Compaq will be subsumed into the HP maw.