HOUSTON, Apr 14: The head of Compaq Computer Corp said on Tuesday that the slack demand and price-cutting that led to his company to warn its earnings would fall short of expectations also could hurt rival computer makers.Compaq chief executive Eckhard Pfeiffer told Reuters in an interview that he was waiting to see if the weak demand and price competition showed up in his rivals' earnings of other computer makers. ``I'm waiting for the results of everybody else in the industry,'' Pfeiffer said.``That will be interesting, because I've talked to a lot of people and they have generally confirmed that it was a very tough quarter,'' he said at Compaq's Innovate Forum 99, a gathering of customers, analysts and news media.Since Compaq warned on Friday that its earnings for the first quarter would fall far short of Wall Street expectations, analysts and at least one other top industry executive have said the problems cited by Pfeiffer were more specific to Compaq rather than industry-wide. On Friday, Compaqsaid it expected to report next week that in the quarter ended March 31 it earned 15 cents a share - well below analysts' estimates of 31 cents - on lower-than-expected revenues of $9.4 billion. Compaq stock dropped more than 20 per cent on Monday, falling $6.88 on the New York Stock Exchange to close at $24.06. On Tuesday, it fell to $23.88.Analysts said Compaq might have been hurt by retailer resentment as it stepped up efforts to sell directly to computer buyers and by its efforts to digest Digital Equipment Corp which it bought last summer for $8.4 billion.Hewlett Packard Co chief executive Lewis Platt on Tuesday said his company's personal computer business remained healthy and profitable, despite warnings by key rivals that the best years of the PC business may be over.Speaking to reporters at the New York Stock Exchange, Platt took issue with warnings by Compaq of weak near-term PC demand and mocked IBM chairman Lou Gerstner's widely quoted view that the PC era is over. ``The PC era is over?''Platt said in response to a reporter's question. ``I don't think so,'' he said. Intel Corp, the world's largest maker of computer chips, helped ease some concerns about the possibility of a major slowdown in PC sales when it reported higher-than-expected earnings. ``Intel's numbers indicate that the PC market is still hot,'' said Ashok Kumar, an analyst with US Bancorp Piper Jaffray. ``It's not super hot, but it's healthy.''Pfeiffer, however, said earlier that there had been indications from other computer firms that they also suffered in the quarter, meaning that Compaq, the world's No 1 personal computer maker, was not alone. ``That it is not an industry issue I find a little strange when there are enough signals out there that people only need to look at,'' he said.Compaq said demand for business computers was down in the first quarter, which forced price-cutting and hurt margins. Pfeiffer said there were plenty of analysts' reports out there confirming the industry's plight. ``You read severalanalyst reports who have also gone and looked at what is happening - what growth is in the small and medium business markets, for example - and they've come back and said it's single digit only. It was expected to be in the mid-teens,'' he said. Pfeiffer's discussion about the industry's problems came in response to a question about whether the factors hurting Compaq in the first quarter were now easing up. He said the company would talk more about current and future conditions when it announces results on April 21. In a speech to the conference, Pfeiffer said the company would increase its focus on the Internet, both as a content provider through the Alta Vista search engine it got as part of the Digital acquisition and as an equipment and service vendor. He said the Internet and its limitless potential for growth now define the company's goals the way its ambition to become the leading PC maker once did. ``We set a vision to become No 1 (PC maker), we did it. We said we wanted to be in the world"s top 3,we're there.
