Compaq profits rise strongly, and analysts are impressed

Article Abstract:

Compaq earned $267 million in 2nd qtr 1996, an 8.5% increase over the $246 million earned in 2nd qtr 1995, surprising analysts with an unexpectedly strong quarter. Revenues increased only 14%, from $3.5 billion in 1995, to $4 billion for the 1996 quarter and were hurt by slow sales in Europe. However, the gross profit margin reached 23%, up from 21% in 1st qtr 1996, and Compaq claims that it can maintain the margin and that sales will continue strong for the rest of 1996. Compaq is the largest PC vendor in the world, but it is not clear whether Compaq's report will boost the computer industry as whole or technology stocks in general. Compaq's gains represent internal efforts to lower costs and not general conditions in the computer industry. Compaq increased profits by speeding up its collections process, simplifying new product design and cutting its inventory by $400 million. The improvements allowed Compaq to hold $1.9 billion in cash, an 89% increase from 1st qtr 1996.

Finance, Company sales and earnings, Company Sales/Revenue, Company Earnings/Profit

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Compaq bolsters its top management

Article Abstract:

Compaq is continuing to make changes to its management. Ross Cooley, senior VP for North America, is retiring after 14 years with Compaq and will be replaced by James Schraith, previously the Pres and COO of AST Research. Richard Snyder, formerly with Dell Computer, is the company's new senior VP for worldwide sales and marketing. Alan Lutz, formerly with Unisys Corp, will head a new networking and communications hardware division. Recently-hired Mark A. Canepa, a former HP employee who was appointed general manager of Compaq's new workstation division, has left the company after just three weeks and is joining Sun Microsystems. Gary Stimac, the company's fifth employee, and CFO Daryl White left earlier in 1996. Compaq is the world's largest PC vendor. The management changes are part of an effort to move Compaq from its position as the world's fifth-largest computer vendor to third place by the turn of the century.

Management, Company Business Management, Company Employee

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Pioneer in minicomputers is trying again at age 69

Article Abstract:

Ken Olsen, the founder and president of DEC who was forced to resign after 35 years, has formed Advanced Modular Solutions with the vision of proving alternatives for corporate computing. Olsen believes that the PC has created anarchy in corporations in the form of hard-to-manage random configurations of software, hardware and peripherals. Modular's goal is to impose the discipline placed on minicomputers and mainframes onto networks of PCs. The company makes desktop computers without disk drives that have Intel memory chips and microprocessors. The computers are linked to servers that house the software. Under this design, employees can only access programs from the central server. New programs can only be added via a systems administrator, an act which is in a corporation's best interest. Modular is experiencing moderate success. It provides equipment to Wall Street firms, NASA and health care companies.

Planning, Microcomputer industry, Marketing, Science and technology policy, Company marketing practices, Systems integration, Company business planning, Olsen, Kenneth H., Computer systems integration, Company Business And Marketing, Advanced Modular Solutions Inc.

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