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July 1, 1987

COMPAQ SEES SECOND QUARTER PROFITS TRIPLING, LOTUS HINTS AT A BOUNCE

By CBR Staff Writer

Whatever will be the impact of the Personal System/2 on IBM’s rivals and on the software and add-on industries, in the US, there is no sign of any fall-off in business or a wait-and-see attitude among users. Compaq Computer Corp and Lotus Development Corp were both on the hustings on Tuesday, both propagating very bullish statistics indeed. Compaq confidently expects to confound analysts who were going for sales of $200m to $230m for the Houston firm’s second quarter by bringing in sales of over $250m – and that will feed straight through to the bottom line, with per share earnings topping the high end of the 40 cents to 64 cents a share that the entrail readers have been forecasting. That implies profits tripled to $25.5m – this time last year, the company did $9.6m net, 31 cents a share, on sales of $147m so the upsurge seen by the company is dramatic. Compaq says that the bubbling figures are fuelled by strong demand for the Deskpro 386, the 12MHz Deskpro 286, and the Portable III – which led to it shipping more machines during the second quarter than in any previous period in its history. Nor does Lotus see any downturn in the Personal Computer market: president Jim Manzi told New York analysts that it expects its sales growth to exceed that of the industry as a whole – and describes as reasonable forecasts that the industry will grow about 20% this year. Lotus also said warily that it is not uncomfortable with es-timates that it will turn in second quarter per share earnings of 31 or 32 cents for the period that ends tomorrow, up from 25 cents a year ago.

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