Capellas Says Enterprise, Services To Drive
Compaq's Growth
Fourth-quarter operating profit rose 55 percent
By Craig Zarley, CRN
Houston
8:20 PM EST Tues., Jan. 23, 2001
Compaq Computer is sticking with its $9.6 billion revenue
target and earnings projections of 21 cents per share for
its first fiscal quarter, according to the company. Compaq
executives said they expect enterprise products and
services to lead the growth.
Compaq Chairman and CEO Michael Capellas said in a
conference call with analysts following the company's
fourth-quarter earnings announcement that he expects PC
revenue to increase 3 percent to 5 percent this year,
services to grow 6 percent to 8 per cent and enterprise
products to jump 13 percent to 15 percent. What's more,
Capellas told analysts that enterprise products and
services combined accounted for 51 percent of Compaq's
fourth-quarter 2000 revenue and 90 percent of its profit.
Enterprise products and services will continue to be the
profit driver in 2001, he said. The greatest profit
opportunity will be "taking the high-end products and
bundling them with other [Compaq] products, he said.
Meanwhile, Mike Winkler, Compaq's executive vice president of Global Business Units, said
there is a backlog of some 300,000 iPaq pocket PCs. The company shipped 200,000 of the
devices in the fourth quarter and expects to ship 100,000 systems this month, he added.
Compaq Tuesday reported a loss in the fourth quarter after taking a hit on its technology
investments and weakening demand in the U.S. consumer market for personal computers.
Excluding a $1.8 billion charge, its fourth-quarter operating profit rose 55 percent, slightly
more than Wall Street was expecting due to a profit warning it issued last month. The
company reported fourth-quarter operating income of $515 million, or 30 cents per share,
compared with net income of $332 million, or 19 cents per share, a year earlier.
Including the $1.8 billion charge for the write-off of investments, principally from the decline
in value of its stake in CMGI, Compaq reported a loss of $672 million, or 39 cents per share.
Revenue for the year ended Dec. 31 totaled $42.4 billion, an increase of 10 percent over the
prior year.
Net income from operations was $1.7 billion, up more than three-fold over the prior year.
Including nonrecurring items, net income for the full year was flat with last year at $569
million, or 33 cents per diluted common share. |
