SAN MATEO (04/28/2000) - The planned merger between U.S. carriers MCI Worldcom Inc. and Sprint Corp. is running into trouble in the European Union, EU Competition Commissioner Mario Monti revealed last week. Monti said the EU's investigation into the merger has unearthed serious concerns about the merger's impact on competition. The commission believes that the merger will lead to a dominant position regarding both the provision of high-speed global services for multinational companies and the termination of international voice telephony calls in the United States. The commission has until July 7 to rule on the merger but is likely to ask the two parties to make certain concessions before that date.

MARKET SHARE: PC shipments rise, eMachines shinesDISCOUNT PC vendor eMachines burst into the top tier of computer companies in U.S. sales during the first quarter of this year -- which saw robust growth in worldwide PC shipments -- according to preliminary figures from two market research companies.

Global PC shipments grew 15 percent for the first quarter of this year compared to a year ago, according to preliminary figures released last week by Dataquest. Rival researcher IDC also released preliminary figures for the quarter showing worldwide PC shipments rising 20 percent year to year.

Total unit shipments hit 29.9 million PCs in the first quarter, compared to 26 million units in the same quarter a year ago, Dataquest found. IDC reported 30.4 million units shipped, compared to 25.5 million units one year earlier.

U.S. shipments grew 17 percent year to year, with 11.6 million units shipped in the first quarter of this year, IDC officials said. Consumer demand pushed eMachines into the No. 5 spot among top-tier vendors, with IBM dropping out of the top five.

Dataquest's top U.S. vendors for the quarter were Dell, Compaq, Hewlett-Packard, Gateway, eMachines, Apple, and IBM. IDC's top five U.S. vendors were Dell, Compaq, HP, Gateway, and eMachines.

FINANCIALS: Compaq's revenue flat in first quarterCOMPAQ'S GROWING pains continue to plague the company as it tries to evolve from a PC manufacturer into a broader systems provider. Compaq last week reported a minuscule 1 percent increase in revenue in the first fiscal quarter.

The company posted $9.51 billion in revenue in the first fiscal quarter ending March 31, 2000, compared with revenue of $9.41 billion in the same quarter of last year.

Compaq blamed the tiny revenue increase on a spending slowdown caused by the Y2K problem, weakness in Europe, and the company's measures to shrink its channel inventory. Adjusted for currency fluctuations, the revenue increase would have been 4 percent, Compaq officials said.

Net income, including an after-tax gain of $44 million from investments, was $325 million, or 19 cents per share, compared with $281 million, or 16 cents per share, in the same quarter last year. Excluding the after-tax gain, Compaq's earnings were 16 cents per share, which was the consensus from 29 analysts polled by First Call/Thomson Financial.

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