Capellas To Employees: 'Deliver The Quarter'

Compaq Computer Hewlett-Packard

"We have only eight business days left in [the first quarter," Capellas told employees in a companywide e-mail, "and we need to focus all of our efforts on meeting our financial goals. We cannot let any uncertainty over the outcome of the merger distract us from achieving our immediate objectives."

Compaq is expected to report a profit of a penny per share for its first quarter, on revenue of $7.6 billion.

Capellas' e-mail was made public through a filing with the U.S. Securities and Exchange Commission.

A day before Compaq's shareholder vote, HP shareholders met to vote yes or no to the proposed $21 billion deal to marry the two computer makers. While the precise vote tally won't be known for as long as six weeks, HP executives said, they nonetheless declared victory in the merger vote after speaking with their proxy consultant after the vote had closed.

If successful, HP will have beaten back a challenge by dissident board member Walter Hewlett, who has opposed the deal and who waged a furious battle with shareholders in hopes of getting them to vote down the deal.

Compaq's shareholders, conversely, are expected to give a rousing approval to the deal. In public statements, Capellas said he believed Compaq shareholders would approve the merger by a comfortable margin.

In his e-mail, though, he told employees they needed to focus on four things, including delivering a financially successful first quarter.

"We need to spend as much of our time as possible during the next few weeks meeting and talking with customers around the world," he said.

He said employees needed to "continue to take the actions that strengthen our business--building on the progress we've made during the past year. We're not backing off one inch from doing what's necessary to improve our business model and our competitive position," he said.

And Compaq needs to "execute our strategy to expand our enterprise capabilities, grow and achieve critical mass in global services and improve the economics of our PC business," he said.

"If the merger goes through, these actions will make the combined company much stronger," Capellas told employees. "If it doesn't go through, they will make Compaq even stronger."

But he also repeated his confidence "that approval of the merger will be confirmed after the legal process is completed."