Compaq Server Plan Will Trim Pretax Profit

Compaq Computer Corp. said its pretax profit will be reduced by up to $250 million in its fourth and first quarters because of a plan to stop making its high-powered Alpha computer servers that support Microsoft Corp.’s Windows operating system. According to a filing with the Securities and Exchange Commission, Compaq expects operating income to be reduced by $50 million to $100 million in the fourth quarter and by an additional $100 million to $150 million in the next period. The Houston-based company said in August that it would stop running Microsoft’s operating system on its servers that are based on its Alpha processor. Last month, Compaq reported third-quarter profit from operations of $117 million, or 7 cents a share, compared with $115 million, or 7 cents, a year earlier. Compaq shares closed down 25 cents at $25 on the New York Stock Exchange.