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Subject:
(UPDATE) Compaq's 4th-Quarter Earnings Rose 37% On Strong Sales Of Servers
Date:
Wed, 21 Jan 1998 09:25:22 -0800 (PST)
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News Alert from Dow Jones Online News via Quote.com
Topic: (NYSE:CPQ) Compaq Computer Corp,
Quote.com News Item #5136760
Headline: (UPDATE) Compaq's 4th-Quarter Earnings Rose 37% On Strong Sales Of
Servers
======================================================================
NEW YORK -(Dow Jones)- Compaq Computer Corp., buoyed by strong demand
for its servers, Wednesday reported a 37% jump in fourth-quarter
earnings on a 23% improvement in sales, matching Wall Street estimates.
The nation's top personal computer maker (CPQ) also said its expects
a strong 1998 despite weakness in Asia.
For the fourth quarter, Compaq posted net income of $667 million, or
84 cents a diluted share, compared with $487 million, or 63 cents a
diluted share, in the year-ago period. The latest quarter's per-share
results were a penny better than the estimate provided by analysts
surveyed by First Call.
Sales soared to $7.32 billion from $5.97 billion.
The Houston-based company said its enterprise computing business -
which includes servers, workstations, clustering technology and primary
and secondary storage products - accounted for 37% of its business in
the fourth quarter.
Compaq said its volume grew more than 2 1/2 times the industry's rate
in the fourth quarter and that its gross margin was 27.6%. The company
also said its focus on asset management lifted its cash balance 66% from
the previous year to $6.8 billion and increased its return on invested
capital to 90% for the fourth quarter from 49%.
For the full year, Compaq posted net income of $1.86 billion, or
$2.37 a share, on sales of $24.58 billion. A year earlier, the company
earned $1.32 billion, or $1.74 a share, on sales of $20.01 billion.
The results for 1997 included a charge of $208 million, or 27 cents a
share, related to its acquisition of Microcom during the second quarter,
and a charge of $44 million, or six cents a share, from costs associated
with the Tandem merger.
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