Breakfast With The Fool: Compaq Unsurprisingly Warns ,
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            B R E A K F A S T   W I T H   T H E   F O O L
                      Wednesday, December 13, 2000

benjamin.rogers@enron.com
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COMPAQ UNSURPRISINGLY WARNS
Computer maker Compaq became a member of the warnings club
yesterday.

By LouAnn Lofton

Compaq Computer (NYSE: CPQ) joined its PC-related brethren
yesterday on the warning train. Gateway Computer (NYSE: GTW),
Apple (Nasdaq: AAPL), Intel (Nasdaq: INTC), and Advanced Micro
Devices (NYSE: AMD) have all warned the Street recently that
sales and earnings in their fourth quarters would be below expectations.

Compaq lowered guidance for the fourth quarter and for its next
fiscal year after the close of market yesterday. It also
announced that it will take a non-cash charge in the fourth
quarter related to the decline in value of some of its investments.

Compaq's revenues for the fourth quarter will now be between
$11.2 billion and $11.4 billion. That's below the expected $12.3
billion, but still above last year's $10.4 billion. Compaq
expects earnings, minus charges, to be in the range of
$0.28-$0.30 a share. Analysts were looking for $0.36 a share.
Compaq earned $0.19 a share last year.

The company blamed weak sales of its computers to U.S. consumers
and businesses, and softness in the demand for its servers.
Compaq is optimistic about the next fiscal year, but did lower
its guidance for results.

Chairman and CEO Michael Capellas said, "Our current 2001 plan
calls for 10% revenue growth and 25% growth in earnings per
share over the revised estimates for the fiscal year 2000.
Although this is lower than our previous guidance, it still
reflects strong year-over-year improvement." According to First
Call/Thompson Financial, analysts expected earnings to grow
about 40% in the next fiscal year.

Compaq also said that it will take a non-operating, non-cash
charge in the fourth quarter, related to the decline of some of
its investments. Internet incubator CMGI (Nasdaq: CMGI) and its
related assets are the main holdings that are causing this move.
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NEWS TO GO

Biotech company Amgen (Nasdaq: AMGN) announced share repurchase
plans yesterday after the bell. The company plans to buy back up
to $2 billion in common stock between January 1, 2001 and
December 2002. Amgen also said that President and CEO Kevin
Sharer will be adding chairman to his title. The current
chairman, Gordon Binder, will retire December 31, as previously
announced.

Retailer Claire's Stores (NYSE: CLE) will miss fourth-quarter
earnings estimates. The company said yesterday that it sees
earnings per share for the fourth quarter of between $0.70 and
$0.80. Analysts had expected $1.12 a share. The company blamed
slow sales for the disappointing results.

Embedded computer maker Radisys (Nasdaq: RSYS) warned yesterday
that it will not meet current earnings and sales expectations.
Radisys is looking for fourth-quarter revenue of around $83
million, versus the $90.7 million it originally predicted.
Earnings per share for the fourth quarter will be between $0.20
and $0.24. Analysts, and the company itself, expected $0.41 a
share. The company also said that the first quarter of its new
fiscal year should return results about flat with the
fourth-quarter results. Analysts had expected Radisys to have
earnings per share in the first quarter of $0.42.

Internet consulting firm Razorfish (Nasdaq: RAZF) cut its
fourth-quarter outlook yesterday. This is the second time the
company has done so. Razorfish now expects to post a loss of
between $0.17 and $0.22 a share for the quarter, excluding
certain charges. Analysts were expecting a profit of $0.02 a
share.
_________________________________________________________________

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