When Compaq reduced its forecast on Oct. 1, it said customers had delayed purchases because they weren't sure whether products would be available after the company is acquired by Hewlett-Packard. Today, Capellas said Compaq hasn't seen "a dramatic effect" from customers putting off purchases.
Microsoft's new operating system, Windows XP, hasn't yet given a lift to sales, said Capellas. Windows XP, which is being officially unveiled today by Microsoft, has been on sale by PC makers since last month. It might spur sales closer to Christmas, Capellas said.
"It will make things better for sure," he said. "How much better, we'll see."
Compaq expects a "modest" seasonal increase in North America this quarter, with some stabilization in Europe, said Capellas. The Japanese economy is still slowing, while Singapore, South Korea and the rest of Asia Pacific are feeling the effects of lackluster growth in US and Japanese markets, he said. China is relatively strong, while Latin America is weak, Capellas said.
Matrix's Katz, who has criticized Compaq's management, said the stock has fallen so much that it might be a good future investment.
"The key in looking at Compaq is that their stock price versus valuation metrics are off the charts," he said. "It's a dirt-cheap stock."
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