Compaq fourth-quarter profits half of year-ago net
Tue Jan 25 17:32:00 EST 2000
HOUSTON, Jan 25 (Reuters) - Compaq Computer Corp.
on Tuesday said fourth-quarter net income fell 56 percent to
$332 million, in line with lowered expectations, as the world's
largest personal computer maker closed out a trying year.
Net income fell to $332 million, or 19 cents per diluted
share, from $758 million, or 43 cents a diluted share, in the
year-earlier quarter. The decline in profits occurred as Compaq
struggled to rebound from plunging PC prices, a management
house-cleaning and a difficult time integrating major
acquisitions over the past two years.
The latest quarter's earnings per share were above a
consensus estimate of 16 cents per share, according to analysts
surveyed by First Call/Thomson Financial. But the results were
in line with informal "whisper numbers" of 18 cents to 20 cents
a share ahead of the report.
Revenues fell 4 percent to $10.5 billion, as the effect of
translating foreign currency into U.S. dollars trimmed results
by 3 percentage points.
Compaq stock dropped 5/16 to close at 32-1/4 a share on the
New York Stock Exchange ahead of the earnings report. The stock
traded little changed in composite trading after the report,
which came after the regular session's close.
Sales of servers, the computers used to manage networks of
other computers, accounted for 51 percent of total revenue and
totaled $5.3 billion, down 3 percent from a year ago, Compaq
said. However, that figure was 8 percent above 1999's third
quarter. The segment, which generates most of Compaq's profits,
saw operating income of $714 million, off 17 percent on the
year.
Compaq was hardest hit in the category for which it is
perhaps best known -- commercial PCs -- where revenues amounted
to $3.1 billion, down 19 percent from a year ago, but up 15
percent from third-quarter sales. The unit, which accounts for
30 percent of total revenue, posted a loss of $79 million -- a
reversal from the profit of $157 million a year earlier.
The consumer PC business remained a bright spot, as the
unit reported record revenue of $2 billion, up 24 percent from
the year-earlier period and up 34 percent from the third
quarter. Compaq benefited from the exit of rival PC makers from
the U.S. retail market, including International Business
Machines Corp. and Packard Bell NEC Inc., a division of
Japan's giant NEC Corp.
((-- Eric Auchard, New York newsdesk, 212-859-1840))
REUTERS
Rtr 17:31 01-25-00
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