http://www.silicon.com/public/door?REQUNIQ=924012406&6004REQEVENT=&REQINT1=29444&REQSTR1=newsnow

relevant quote:

"Jerry Meerkatz, vice president and general manager at Compaq's PC division, has explained why the company sent out a surprise profit warning late last week. Meerkatz told Silicon.com that low sales in North America, the millennium bug and Intel's Pentium III (PIII) chip were to blame for the poor results. He also admitted Compaq's decision to sell directly to businesses instead of through the traditional distributor channels had impacted sales figures.

The company admitted last week it only made a profit of 15 cents per share instead of the 30 cents a share as predicted by financial analysts."

...wow their profits are down by 50 percent in the first quarter...wonder where else we'll see this sort of thing.

Arlin

-- Arlin H. Adams (ahadams@ix.netcom.com), April 13, 1999

Answers

Arlin: I work at Compaq...the y2k reference as I'm sure you know, but other readers who might get misled by the headline refers to companies not buying new pc's right now until the y2k thing blows over as well as they are busy fixing and testing what they have, thus using capital spending for y2k consulting/testing.

Compaq as a company by the way has been busy doing much y2k testing of every one in our offices pc's, our networked servers and everything else they can think of...additionally they have maintained a status log available to employees of progress being made on all internal systems, like accounting, inventory control, etc. etc...

I dont offer this as "everythings fine" or anything like that, only something I have seen first hand at the company---that they are taking steps, at just about every level to at least test, ask, and give the impression that things are being checked out with a drop dead date of june 30...I guess being a computer company and one now that is heavy into servicing other companies computers they better be taking these steps...however from what I've seen with the vast majority of medium to smaller sized companies we deal with I am not seeing anything close to this kind of testing, asking, checking this early.

Thats what scares me the most about any large company--we can be ok, but those we depend on, sell to, service, etc may not be--and than what is the impact to us...repeat this scenario for any large company doing the same early testing with the same dependencies on others who are not and "houston we have a problem"....

One mans view

-- billyboy (billyboy@nowhere.com), April 13, 1999.

Billy,

your points are well taken, and really the main reason I posted this article. One of the great unpredictables is just how far the economic ripples of y2k will reach...I just thought this was an excellent example of how it's having economic effects that are actually occurring BEFORE the event..

Arlin

-- Arlin H. Adams (ahadams@ix.netcom.com), April 13, 1999.