Compaq Computer Corp came up with the goods once again in its second quarter, reporting a 25% increase in revenue to $5bn compared with the same period last year, and net profits up by 58% to $422m, or $1.48 per share, well above First Call’s expectations of $1.39 per share. But there was disappointment in the market, where there has been heavy buying of Compaq stock which has risen $24 over the past ten days as the whisper had gone round traders that the first call figure was too low and earnings would be closer to $1.50, with revenues hitting $5.1bn. The figures exclude the $208m, or $0.73 per share non-recurring charge in connection with its recent acquisition of Microcom Inc (CI No 3,138). Net profit after that charge was $214m, or $0.75 per share. Chief financial officer Earl Mason professed himself pleased with the consistency of our financial progress, especially with the improvements in earnings and the growth of gross margins to 25.3%. He said that better asset management and an increased Days Sales Outstanding, from 60 to 39 days, help lift the company’s cash balance 165% from the previous year to $5.1bn. Chief executive officer Eckhard Pfeiffer said the outlook continued to call for a strong second half, citing the company’s new business model as likely to accelerate market share gains and improve profitability. Unit growth for the second quarter stood at 42%. The first phase, Build-to-Order, is now being implemented, and should result in a shortened manufacturing cycle time, greater product availability and predictability, lower channel inventory and reduced product costs, he said. As Compaq failed to meet market expectations, traders expect a temporary slump in technology stocks, especially as the possibility of a price war in personal computers is now more real. Compaq shares closed the day Thursday down $0.875 at $120.125, after losing as much as $3.25.