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Compaq Confident of Prior Results
Reuters
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 Street analysts.

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 Mason.

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 communications efforts.

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