Very Computer

by **Alan Grei** » Sat, 28 Jul 2001 00:21:47

Just been listening to the Compaq financial analyst webcast. So far
I've just scanned it but I think the figures given were ISSG (Intel)
sales down 26% compared to same quarter last year and BCSG (Alpha)
sales down 13% (mainly due to currency changes). Also stated was the
very low margins in ISSG. So Compaq's unprofitable (or barely so)
Intel server business has plummeted 26% and highly profitable Alpha
business has only dropped off 13%. Which one do you shut down?

Answers on a postcard to Compaq..

Hilariously Capellas refers to Itanium as Itanic at one point before
quickly correcting himself. Webcast now available at www.compaq.com.
--
Alan

by **Terry C. Shanno** » Sat, 28 Jul 2001 02:39:51

Quote:
> Just been listening to the Compaq financial analyst webcast. So far
> I've just scanned it but I think the figures given were ISSG (Intel)
> sales down 26% compared to same quarter last year and BCSG (Alpha)
> sales down 13% (mainly due to currency changes). Also stated was the
> very low margins in ISSG. So Compaq's unprofitable (or barely so)
> Intel server business has plummeted 26% and highly profitable Alpha
> business has only dropped off 13%. Which one do you shut down?

> Answers on a postcard to Compaq..

Without access to Compaq's financial spreadsheets and a breakout of R&D
expenses, it's a tough question to answer. I also noticed that iPAQ
handhelds now account for 17 percent of unit shipments. Perhaps CPQ should
dump everything but the iPAQ?

Again, we are dealing with insufficient information to draw any real
conclusions.

by **JF Meze** » Sat, 28 Jul 2001 03:18:24

> I've just scanned it but I think the figures given were ISSG (Intel)
> sales down 26% compared to same quarter last year and BCSG (Alpha)
> sales down 13% (mainly due to currency changes).

But if BCSG yielded profits of 10 million bucks , it would mean that they
would now yield 8.7 million. If ISSG yielded profits of 12 million, it would
now yield 9 million.

So a drop of 26% in one area doesn't automatically mean that it now yields
less profit.

by **Bill Tod** » Sat, 28 Jul 2001 05:24:30

> > I've just scanned it but I think the figures given were ISSG (Intel)
> > sales down 26% compared to same quarter last year and BCSG (Alpha)
> > sales down 13% (mainly due to currency changes).

> But if BCSG yielded profits of 10 million bucks , it would mean that they
> would now yield 8.7 million. If ISSG yielded profits of 12 million, it
would
> now yield 9 million.

> So a drop of 26% in one area doesn't automatically mean that it now yields
> less profit.

You appear to have missed the accompanying statement that margins in ISSG
were also very low (presumably in comparison with last year's, since that's
the context of the other numbers; it's also consistent with the
industry-standard server 'aggressive pricing environment' Compaq-speak).

The combination of much lower margins (which could easily have actually been
in the negative region, if Compaq's other PC business is any indication) and
significantly lower sales has a devastating effect on relative ISSG profit.
That was the suggestion in the Q2 FinancialDiscussion.pdf document, and this
appears to confirm it.

- bill

by **Alan Grei** » Sat, 28 Jul 2001 23:19:44

On Thu, 26 Jul 2001 17:39:51 GMT, "Terry C. Shannon"

>Without access to Compaq's financial spreadsheets and a breakout of R&D
>expenses, it's a tough question to answer. I also noticed that iPAQ
>handhelds now account for 17 percent of unit shipments. Perhaps CPQ should
>dump everything but the iPAQ?

I think that's what they are doing. Perhaps with a side order. "Would
you like an HSG80 with that sir?" :-(

--
Alan

by **Terry C. Shanno** » Sun, 29 Jul 2001 02:13:05

> On Thu, 26 Jul 2001 17:39:51 GMT, "Terry C. Shannon"

> >Without access to Compaq's financial spreadsheets and a breakout of R&D
> >expenses, it's a tough question to answer. I also noticed that iPAQ
> >handhelds now account for 17 percent of unit shipments. Perhaps CPQ
should
> >dump everything but the iPAQ?

> I think that's what they are doing. Perhaps with a side order. "Would
> you like an HSG80 with that sir?" :-(

> --
> Alan

Nothing would surprise me at this juncture.

Very Computer

ISSG down far, far more than BCSG

ISSG down far, far more than BCSG

ISSG down far, far more than BCSG

ISSG down far, far more than BCSG

ISSG down far, far more than BCSG

ISSG down far, far more than BCSG

ISSG down far, far more than BCSG