Compaq Computer Corp. (NYSE: CPQ) was down73 U.S. cents at $21.77 in morning trading Monday following reports that thecompany’s chief executive officer predicted a slowdown in growth.
Michael Capellas reportedly told German news magazine Der Spiegel that saleswill slow to below 5 percent in the first half of this year from 10 percentin 2000, before picking up later in the year.
In January, Compaq beat analyst estimates for the fourth quarter ended December 31st. The company saidstrong sales of enterprise systems, growth in overseas markets and “solidservices profitability” offset weak demand in the North American personalcomputer market.
Compaq, along with other computer makers, had warned that a slowdown in PCdemand would hurt results.
“While market conditions will be difficult in the first half of the year, wewill continue to differentiate ourselves by developing innovative products,”Capellas said when the results were released.
Capellas also said that management was”comfortable” with analyst estimates of earnings per share growth of 20 to25 percent.
The company reported fourth-quarter income from operations of $515 million,or 30 cents per share, on revenue of $11.5 billion. The net loss totaled$672 million, or 39 cents per share, including a $1.8 billion charge for thewritedown of stock in net incubator CMGI, Inc.
Compaq shares reached a 52-week high of $35 in August, before plunging to alow of $14.30 in December.
PC makers’ stocks have been hard hit lately as demand for their products hasslumped. On Friday, reports that Dell Computer Corp. (Nasdaq: DELL) might beconsidering layoffs sent shares of that company plunging. In morning tradingMonday, Dell was down 97 cents at $22.53.