Compaq Computer Corp spooked Wall Street yesterday with a warning that fourth quarter earnings per share would be below last year’s figures and below analysts’ expectations, slicing $16.25 off share price at $89.75 by 12.30pm, New York time. Rod Canion, Compaq president and chief executive, said October sales came in about 10% below our expectations, leading us to believe that the results of our fourth quarter would not meet analysts’ expectations. Sales for the full fourth quarter, however, are still expected to grow 15% to 20% over the previous year. And, as a result of the normal, tightly controlled financial environment in which the company is managed, we believe our overall performance will be consistent with the company’s long range objective of 8% to 10% profit after tax. Compaq attributed the lower sales to a slowing growth rate of the US market, limited availability of new products in the quarter, and continued uncertainty surrounding the availability of fully functional 80486 chips, – but the warning will raise wider concerns.
