Compaq's Q4
by Clare Haney, IDG News Service\San Francisco Bureau
January 23, 2001, 15:24
PC maker Compaq Computer Corp. Tuesday announced fourth-quarter
financial results at the top end of the profit warning figures the
company issued last month. Strong performances by Compaq's server
and storage businesses helped offset a slowdown in PC sales, the
company said.
For the quarter ended Dec. 31, 2000, excluding a one-time charge,
Compaq's net income from operations was $515 million or $0.30 per
diluted common share, Compaq said in a statement. Revenue
increased 10 percent from a year ago to $11.5 billion.
A group of 21 brokers polled by First Call/Thomson Financial had
predicted that Compaq would report fourth-quarter earnings per share
of $0.28. The analysts had estimated fourth-quarter revenue would
be $11.27 billion.
Compaq had previously announced a one-time charge of $1.8 billion,
primarily related to the write down of CMGI Inc. stock Compaq
acquired in 1999 in a non-cash exchange for AltaVista Co. Factoring
in the charge, Compaq recorded a fourth-quarter net loss of $672
million, or a loss of $0.39 per diluted common share.
"The strength of our enterprise business, international growth and
solid services profitability offset softness in the North American
personal computer market,'' Michael Capellas, Compaq's chairman and
chief executive officer, said in the statement. He added that the
company's server and storage revenue grew 20 percent
year-over-year, with all of the vendor's high-end products performing
well during the quarter.
Breaking those figures down somewhat, Capellas said revenue from
industry standard servers was up 24 percent, "business critical"
server revenue rose by 17 percent, and storage revenue grew by 17
percent.
Looking at fiscal 2000 as a whole, excluding nonrecurring items,
Compaq's net income from operations was $1.7 billion. Including those
items, net income was flat with the previous fiscal year at $569
million or $0.33 per diluted common share. Revenue for the year was
$42.2 billion, 10 percent up over the previous year.
Looking out over fiscal 2001, Capellas said Compaq was "comfortable
with analyst estimates of earnings per share growth in the 20 to 25
percent range."
Compaq warned last month that fourth-quarter earnings per share,
excluding one-time charges, would be between $0.28 and $0.30,
while revenue would be between $11.2 billion and $11.4 billion. Up
until that point, analysts had been expecting Compaq to report a
profit of $0.36 on revenue of $12.31 billion. Compaq executives
blamed a slowdown in demand in the U.S. market for PCs, a weak
Euro and the failure of dot-coms as reasons for its change in earnings
expectations.
Research from market analyst International Data Corp. (IDC) released
Monday still positioned Compaq as the number-one global seller of
PCs, with a 13.6 percent market share, although IDC estimated that
Compaq's fourth-quarter sales only rose 4.2 percent from a year ago.
Compaq lost its number-one position in the U.S. market, slipping to
second place behind Dell Computer Corp., according to IDC.
Compaq (CPQ) released its financial results after the markets closed.
The company's shares ended Tuesday's trading at $20.05, up 1.16
percent on Monday's close.
Compaq can be reached via the Internet at
compaq.com. IDC is a subsidiary of International Data
Group Inc., IDG News Service's parent company, and can be reached
at idc.com. |
