Compaq Computer Corporation, the world's largest computer maker, yesterday disclosed that its first quarter sales would be flat compared with a year earlier and that earnings were likely to be "roughly breakeven". The announcement followed warnings from two other US high-tech giants, Intel and Motorola, that first quarter results would be disappointing.
Compaq's shortfall was primarily associated with the north American market, "where Compaq is taking additional pricing (measures) to meet very competitive conditions," said Mr Earl Mason, Compaq's senior vice president and chief financial officer.
"That's huge," said Mr David Vellante, an analyst with International Data Corporation when asked about the impact of the Compaq announcement on the high-tech sector.
Compaq is now planning price reductions and promotions in the first half of the year, said the company president Mr Eckhard Pfeiffer. He said Compaq's outlook for the second quarter was cautious as the company continued to assess the North American commercial market.
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