NEW YORK Compaq Computer Corp.'s acting
executive team said it was confident of the integrity of its
financial reports following Sunday's resignations by its chief
executive and chief financial officers.
"We are very comfortable certainly in the first 18 hours
(following the resignations) with integrity of all of our
financial reports," Benjamin Rosen, Compaq's chairman and
acting chief executive, said on a conference call with Wall
He was responding to an analyst's question whether investors
could rely on the integrity of current and historical financial
results in the wake of the departures of President and Chief
Executive Eckhard Pfeiffer and Chief Financial Officer Earl
Rosen, himself a pioneering computer industry analyst with
brokerage Morgan Stanley in the late 1970s, confidently fielded
questions from the newer generation but declined to offer many
specifics on strategy or Compaq's first-quarter results.
He said the management shake-up "does not reflect any
changes in the preliminary results we spelled out April 9,"
referring to the company's announcement that its first-quarter
results would be less than half of Wall Street's expectations.
The Compaq co-founder, and longtime power behind the throne
of the world's No. 1 PC maker, deferred further questions about
the latest quarter's results until Wednesday, when Compaq will
report earnings and field questions about business trends.
A Compaq spokesman said the company had hired executive
recruiter Heidrick & Struggles Inc. and another, unidentified
search firm to conduct the search for both a new chief executive
and chief financial officer.
During the call, Rosen said "The search is being conducted
worldwide for the best available candidates," but declined to
respond to a question on whether the company had ruled out
internal candidates in favor of executives outside Compaq.
He said the CEO search was expected to take several months,
and that the CEO-designate would be consulted by the board
before hiring a new CFO, "so that they are compatible."
Rosen reiterated that he believes the company's strategy
remains sound, then added, "However, we plan to examine every
issue confronting the company."
Asked by one analyst if Compaq would consider trading some
of its roughly 15 percent share of the PC market in favor of
focusing on more profitable business segments, he declined to
comment other than to say, "Certainly we are looking at that."
Ted Enloe, a member of the three-man, newly formed office of
the chief executive with Rosen, said that the acting management
would "look at ways to speed up the process of responding to
customer and market needs."
In a similar vein, Rosen acknowledged that in recent years,
Compaq had been outflanked at times by more nimble competitors.
"Compaq is more complex than some of our competitors, but
it is also richer and offers more complete solutions," Rosen
said, referring to the company's capacity to provide not simply
personal computers, but a full range of computer-related
equipment and services to all segments of the market.
"The public relations that we had may not have been as
crisp as it might have been," Rosen said. "Others may have
out-PR'd us," he said, referring to its overall marketing