In Business This Week: HEADLINER: ECKHARD PFEIFFER
WHO SAYS PCs ARE HURTING?
Ah, vindication is sweet. On Apr. 24, Compaq Computer shook off worries about a PC market tumble with a blistering 42% jump in revenues and an 8% hike in first-quarter earnings. The results are a major payoff for CEO Eckhard Pfeiffer, who in March gambled on 20% price cuts to lift lagging demand. Compaq shares climbed 3 1/8 on the news, to 47, regaining some of the 10 points they gave up in March on worries about Pfeiffer's strategy.
The results were nothing short of spectacular. Compaq's North American PC sales were 56% higher than the year-ago quarter. That's better than four times the industry's growth rate. Sanford C. Bernstein analyst Vadim Zlotnikov estimates that the gains came mostly at the expense of Hewlett-Packard, a comer in the PC business.
There's more to come. Pfeiffer expects to continue gaining share, projecting that current-quarter revenues will show a 20% increase over last year's sales. And while margins were hurt by price-cutting, he says upcoming introductions of new "server" computers and laptops should beef them up again.EDITED BY KELLEY HOLLAND By Gary McWilliamsReturn to top
CAN CAT KEEP OUT THE WATCHDOGS?
CATERPILLAR IS TAKING ON the federal government. The Peoria construction-equipment maker is defying a federal warrant and blocking a National Institute for Occupational Safety & Health inspection of its factory in York, Pa. NIOSH wants its scientists to see whether cadmium or other substances are causing health hazards there--but Cat says it has already given NIOSH plenty of information. Now, NIOSH and federal prosecutors in Harrisburg, Pa., are asking a federal judge to fine the company and jail two plant managers. "I think it's absolutely clear that NIOSH has the statutory authority to do health-hazard evaluations," says David Barasch, U.S. Attorney for Pennsylvania's middle district. Caterpillar is scheduled to present its argument to the judge on Apr. 26.EDITED BY KELLEY HOLLANDReturn to top
DUPONT'S LATEST CROP OF BAD NEWS
DUPONT'S LEGAL PROBLEMS with the fungicide Benlate DF just won't clear up. In depositions for a Texas case, several large nurseries allege that DuPont withheld evidence showing it knew about crop damage caused by Benlate. Attorneys for the growers have obtained testimony from three former DuPont employees who say they were ordered to destroy Benlate-ravaged plants in a 1992 product test in Costa Rica. The new charges may give a boost to 85 other cases nationwide alleging that Benlate damaged crops. DuPont CEO John Krol says the allegations in the suit are "absolutely false."EDITED BY KELLEY HOLLANDReturn to top
B&L FINDS ITSELF NOT GUILTY
TWO OF BAUSCH & LOMB'S major divisions in different parts of the world materially overstated their revenues and profits in 1993--but none of the company's top five executives knew about it. At least that's the conclusion of an investigation into the B&L scandal by a committee of the company's outside directors. Given the apparent exoneration of the executives, the board report, prepared with the assistance of former SEC enforcement chief Gary Lynch, seems suspect. But it's impossible to judge the thoroughness of the B&L board's probe: Citing an ongoing SEC investigation into the same matter, which has been under way since December, 1994, the board is keeping the report confidential for now.EDITED BY KELLEY HOLLANDReturn to top