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COMPAQ SECOND QUARTER REVENUE UP 15 PERCENT; NET INCOME UP 43 PERCENT

COMPAQ SECOND QUARTER REVENUE UP 15 PERCENT; NET INCOME UP 43 PERCENT
 HOUSTON, July 22 /PRNewswire/ -- Compaq Computer Corporation (NYSE: CPQ) today reported sales for the quarter ended June 30, 1992 were $827 million, a 15 percent increase over sales of $718 million for the quarter ended June 30, 1991.
 Second-quarter net income was $29 million, or 35 cents per share, representing a 43 percent increase over net income of $20 million, or $.23 per share in the same period of 1991.
 Compaq President and Chief Executive Officer Eckhard Pfeiffer said, "Compaq has captured tremendous sales momentum with our products introduced late in the second quarter. We've experienced strong demand for all our products, which demonstrates that given affordable pricing from Compaq, customers prefer the quality and reliability of COMPAQ products. We have always been an industry leader in performance-based products but with our new affordable PCs we've become a worldwide price leader as well. Despite shipping in record volumes -- unit shipments were up 51 percent over last year's figures -- we entered third quarter with considerable product backlogs on new and existing PC products due to parts shortages."
 "We are working diligently to capture the significant sales opportunity for our new products by running three manufacturing shifts in our Houston and Singapore factories and two shifts in our Scotland factory," Pfeiffer said, "and are moving aggressively to secure additional materials. We've moved into high-volume production for our newest products at a rate unprecedented in the Company's history."
 Pfeiffer added, "Compaq has become an aggressive competitor on every front with new products, pricing, advertising, customer support and expanded distribution. Dramatically lower prices for COMPAQ PCs have reduced gross margins despite deep product cost reductions. In coming quarters Compaq will not relent in reducing costs in order to maintain price competitiveness. The company will benefit from a growing revenue base with its high-volume products, although aggressive prices will continue to influence margins."
 Pfeiffer said, "We are in a position of financial strength with more than $750 million in cash and minimal debt. Compaq will continue to spend in key areas such as advertising, product development and customer support to spur further unit growth and market share gains. During the second half of the year all three Compaq product divisions -- PCs, Systems and Peripherals -- will be unveiling new products."
 Second quarter net income was positively influenced by an after-tax contribution of $6.5 million from the company's equity interest in Conner Peripherals, Inc.
 On June 15, Compaq introduced the low-cost COMPAQ ProLinea desktop line with suggested list prices starting at $899; upgradable COMPAQ DESKPRO/i with advanced graphics and audio capabilities starting at a suggested list price of $1,779; top-of-the-line COMPAQ DESKPRO/M Windows editions; brilliant-color COMPAQ LTE Lite/25c notebook with an integrated trackball; and affordable COMPAQ Contura notebook with suggested list prices starting at $1,699.
 On June 8, Compaq extended its PC server leadership with the announcements of a new drive-arrayed COMPAQ SYSTEMPRO, new server management software and the resale of Novell NetWare with complementary tools.
 Sales for the first six months of 1992 were $1.6 billion, compared with $1.7 billion in the first six months of 1991. Net income for the first six months of 1992 was $74 million, or 88 cents per share, compared with $135 million, or $1.49 per share on a fully diluted basis during the corresponding period last year.
 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/or supported in more than 70 countries through a network of more than 5,000 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 a broad range of service and support programs, including free technical support through the Customer Support Center, worldwide product warranties and product information on CD-ROM.
 For Customer Service and Information, call 800-345-1518.
 ---
 NOTE: COMPAQ, DESKPRO, ProLinea, Contura, LTE and SYSTEMPRO are registered trademarks (registered U.S. Patent and Trademark Office) of Compaq Computer Corporation.
 COMPAQ COMPUTER CORPORATION
 CONSOLIDATED BALANCE SHEET
 (Unaudited)
 June 30, Dec. 31,
 1992 1991
 ASSETS (in thousands)
 Current assets:
 Cash and short-term investments $767,286 $452,174
 Accounts receivable 551,691 624,376
 Inventories 390,596 436,824
 Prepaid expenses 146,336 269,203
 Total current assets 1,855,909 1,782,577
 Investment in affiliated company 156,282 142,057
 Property, plant and equipment,
 less accumulated depreciation 856,849 883,765
 Other assets 17,361 17,987
 TOTAL $2,886,401 $2,826,386
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
 Accounts payable $312,152 $195,582
 Income taxes payable 42,820 33,103
 Other current liabilities 350,305 409,258
 Total current liabilities 705,277 637,943
 Long-term debt 73,165 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;
 81,435,208 and 84,201,515
 shares issued and outstanding 814 842
 Capital in excess of par value 455,492 536,814
 Retained earnings 1,467,370 1,393,048
 Total stockholders' equity 1,923,676 1,930,704
 TOTAL $2,886,401 $2,826,386
 COMPAQ COMPUTER CORPORATION
 CONSOLIDATED STATEMENT OF INCOME
 (Unaudited)
 (in thousands, except per share amounts)
 Six months ended Quarter ended
 June 30, June 30,
 1992 1991 1992 1991
 Sales $1,610,024 $1,688,596 $826,976 $717,845
 Cost of sales 1,097,748 1,039,283 577,043 470,185
 Total 512,276 649,313 249,933 247,660
 Research and
 development costs 88,743 101,054 44,148 52,874
 Selling, general and
 administrative expense 324,027 378,480 164,481 179,865
 Other income and
 expense, net 10,341 (13,547) 12,827 (7,332)
 Total 423,111 465,987 221,456 225,407
 Income from consolidated
 companies before provision
 for income taxes 89,165 183,326 28,477 22,253
 Provision for
 income taxes 29,424 62,331 9,396 7,567
 Income from
 consolidated companies 59,741 120,995 19,081 14,686
 Equity in net income
 of affiliated company 14,581 13,568 9,915 5,599
 Net income $74,322 $134,563 $28,996 $20,285
 Earnings per common
 and common
 equivalent share 88 cents $1.49 35 cents 23 cents
 Earnings per common
 and common
 equivalent share -
 assuming full
 dilution 88 cents $1.49 35 cents 23 cents
 -0- 7/22/92
 /CONTACT: (Editorial) Bob Beach, Debra Globe or Nora Hahn of Compaq Computer, 713-374-0484; or Tony Sapienza or Donna Ruane of Miller Communications, 617-536-0470; or (Electronic media) contact: Tom Pearson of Pearson Communications, 215-644-4420, for Compaq/
 (CPQ) CO: Compaq Computer Corporation ST: Texas IN: CPR SU: ERN


SH -- NE002 -- 1633 07/22/92 07:00 EDT
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Date:Jul 22, 1992
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