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COMPAQ ANNOUNCES QUARTERLY RESULTS; PROVIDES UPDATE ON NEW STRATEGIES

 COMPAQ ANNOUNCES QUARTERLY RESULTS;
 PROVIDES UPDATE ON NEW STRATEGIES
 HOUSTON, April 27 /PRNewswire/ -- Compaq Computer Corporation (NYSE: CPQ) today reported first-quarter net income of $45 million, or $.53 per share, representing a 60 percent decrease from net income of $114 million, or $1.26 per share in the same period of 1991.
 Sales for the quarter ended March 31, 1992 were $783 million, a 19 percent decrease from sales of $971 million for the quarter ended March 31, 1991.
 Worldwide demand for COMPAQ products in the first quarter was up year to year, while unit shipments were slightly down due to part shortages. Lower prices were the primary reason for the decline in the Company's revenue and earnings in the quarter.
 Compaq President and Chief Executive Officer Eckhard Pfeiffer said, "Although our first quarter financial results reflect a very competitive market environment, we have taken significant steps to strengthen our position. We introduced major new products, continued aggressive pricing actions, dramatically reduced product costs and redirected significant resources to serve the changing needs of our customers."
 Pfeiffer said, "Late in the second quarter the public will see the first major wave of new COMPAQ products and a compelling new advertising campaign. We'll broaden our line with these aggressively-priced, entry- level desktops and notebooks that will appeal to our traditional business customers as well as customers in the home, individual user and small business markets. We'll also keep the pricing on current products competitive. With our new range of products and our flagship products, such as the COMPAQ DESKPRO/M, COMPAQ SYSTEM PRO and COMPAQ notebooks, we will have one of the industry's most comprehensive and price-competitive lines."
 "Our financial results for the remainder of the year will continue to be influenced by aggressive pricing and increased expenses due to an ambitious advertising schedule, the introduction of new products late in second and third quarters, and expansion of our distribution. In this transitional period, earnings could be down in the second and third quarters from first quarter 1992 and we are unlikely to see the positive impact of our plans on earnings before fourth quarter.
 "Although it will take time, the dramatic changes we've made are already having an impact. We are encouraged by recent market feedback that customers prefer COMPAQ quality, reliability and support when they are available at competitive prices. Customers are finding COMPAQ products are more cost-effective in the long run."
 "Our decisive actions clearly reflect Compaq's new, strategic direction," Pfeiffer said. "As the year unfolds we'll continue to take actions that will ensure our long-term success. In particular, we will:
 -- add leading-edge programs and shift resources to ensure optimal customer support and satisfaction;
 -- roll out a broader, aggressively-priced product line that spans the range from entry-level to networked systems solutions;
 -- reduce cost in the design and manufacture of products to allow lower prices without compromising quality or reliability; and
 -- reach out to new, first-time customers with expanded distribution methods.
 "At the top of our corporate priorities is customer satisfaction," Pfeiffer said. "We are committed to serving the changing needs of our customers. Last quarter, for instance, we continued to improve our customer support center. We now have an easier-to-use response system and customer questions are answered by staff with specialized areas of expertise. Customers can also get information 24 hours a day, seven days a week through an automated facsimile (FAX) response system."
 "Compaq is making strategic investments today for the future," Pfeiffer concluded. "Our goals are to be highly cost-competitive, a technology leader and a high-quality manufacturer of reliable products. To ensure our ongoing technological leadership, we're seeking out new opportunities and we'll leverage our financial resources to attain them. In our systems business, we're pursuing enterprise-wide network solutions. In PCs, we're expanding our efforts into many areas of PC- related technologies such as pen-based computing and other new technologies. We'll continue to introduce customer-focused programs and to redirect resources to ensure a high level of customer satisfaction. We're committed to meeting the needs of our customers and evolving with the constantly changing marketplace."
 For the year ended December 31, 1991, the Company reported net income of $131 million, or $1.49 per share, on sales of $3.3 billion. For the quarter ended December 31, 1991, the Company reported revenues of $873 million and net income of $67 million, or $.77 per share.
 Compaq Computer Corporation is a world leader in the manufacture of PC systems, and desktop, portable, laptop and notebook personal computers. Founded in 1982, the Company reported 1991 worldwide revenues of $3.3 billion.
 COMPAQ products are sold and supported in more than 69 countries through a network of more than 3,500 Compaq Marketing Partners, including authorized resellers (national chains, franchisors and superstores), specialized dealers, value added resellers (VARs), distributors, network integrators, systems integrators and authorized third party maintainers. Compaq also offers customers a broad range of service and support programs, including free technical support through the Customer Support Center (800-345-1518), worldwide product warranties and product information on CD-ROM.
 (Editor's note -- COMPAQ, DESKPRO, LTE and SYSTEMPRO are registered trademarks (registered U.S. Patent and Trademark Office) of Compaq Computer Corporation.)
 COMPAQ COMPUTER CORPORATION
 CONSOLIDATED BALANCE SHEET
 (Unaudited)
 ASSETS
 March 31, December 31,
 1992 1991
 (in thousands)
 Current assets:
 Cash and short-term
 investments $ 745,849 $ 452,174
 Accounts receivable 527,331 624,376
 Inventories 400,720 436,824
 Prepaid expenses and other
 current assets 135,573 269,203
 Total current assets 1,809,473 1,782,577
 Investment in affiliated
 company 147,033 142,057
 Property, plant & equipment,
 less accumulated
 depreciation 870,207 883,765
 Other assets 18,115 17,987
 $ 2,844,828 $ 2,826,386
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
 Accounts payable $ 265,947 $ 195,582
 Income taxes payable 37,084 33,103
 Other current liabilities 336,051 409,258
 Total current liabilities 639,082 637,943
 Long-term debt 73,312 73,456
 Deferred income taxes 184,283 184,283
 Stockholders' equity:-
 Preferred stock: $.01 par value; 10,000,000 shares authorized;
 none issued and outstanding
 Common stock: $.01 par value; 400,000,000 shares authorized;
 83,340,577 and 84,201,515 shares issued and outstanding
 833 842
 Capital in excess of par value 508,944 536,814
 Retained earnings 1,438,374 1,393,048
 Total stockholders' equity 1,948,151 1,930,704
 $ 2,844,828 $ 2,826,386
 COMPAQ COMPUTER CORPORATION
 CONSOLIDATED STATEMENT OF INCOME
 (Unaudited)
 Quarter ended March 31 1992 1991
 (in thousands, except per share amounts)
 Sales $ 783,048 $ 970,751
 Cost of sales 520,705 569,098
 262,343 401,653
 Research and development
 costs 44,595 48,180
 Selling, general & administrative
 expense 159,546 198,615
 Other income & expense, net (2,486) (6,215)
 201,655 240,580
 Income from consolidated
 companies before provision
 for income taxes 60,688 161,073
 Provision for income taxes 20,028 54,764
 Income from consolidated
 companies 40,660 106,309
 Equity in net income of
 affiliated company 4,666 7,969
 Net income $ 45,326 $114,278
 Earnings per common and common equivalent share:
 Primary $ .53 $ 1.26
 Assuming full dilution $ .53 $ 1.26
 -0- 04/27/92
 /CONTACT: Bob Beach, Debra Globe, Nora Hahn of Compaq Computer, 713-374-4613 or Tony Sapienza, Donna Ruane of Miller Communications, 617-536-0470 or Tom Pearson of Pearson Communications, 215-648-3975, for Compaq Computer/
 (CPQ) CO: Compaq Computer Corporation ST: Texas IN: CPR SU: ERN


JP -- NY012 -- 2885 04/27/92 06:31 EDT
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