HP Meets Wall Street's Expectations
SAN JOSE, Calif., May 14, 2002 (AP Online via COMTEX) -- In its last quarter of
life without Compaq Computer Corp., Hewlett-Packard Co. reported sharply higher
earnings, in line with Wall Street's expectations even though its sales fell
short.
For its second quarter ended April 30, HP on Tuesday reported net income of $252
million, or 13 cents per share, compared with $47 million, or 2 cents per share,
in the year-ago quarter.
Revenue dropped 9 percent to $10.6 billion from $11.7 billion in the year-ago
period.
Excluding acquisition-related and other one-time charges, HP said earnings were
$498 million, or 25 cents per share, up from $336 million, or 17 cents per
share, a year ago.
Analysts were expecting earnings excluding charges of 25 cents per share and
revenue of $11.1 billion, according to Thomson Financial/First Call.
Aggressive cost cutting helped the company meet earnings targets, but revenue
suffered largely because of depressed corporate spending on technology, the
company said.
"While a muted recovery in the second half is still possible, we are not
counting on a meaningful improvement in IT spending until 2003," Chief executive
Carly Fiorina said.
Still, the quarter's relatively good results will allow HP to pay employee
bonuses for the first time in 18 months, she said.
The results represent HP's final quarter prior to its merger with Compaq. After
a contentious proxy battle led by former HP director Walter Hewlett, the $18
billion marriage of the two became official a week ago.
Of the $260 million in one-time charges for the second quarter, $149 million was
merger-related, said chief financial officer Bob Wayman. Merger expenses
included $75 million on advertising and proxy solicitations for the drawn out
battle, he said.
Most analysts are giving the new HP at least six months to begin delivering on
its financial promises, including that the acquisition will lead to $2.5 billion
in cost savings and a 12 percent increase in earnings. Chief executive Carly
Fiorina has said she would be disappointed if HP doesn't exceed its forecasts.
HP said Tuesday it would give guidance and spending plans for the combined
company at a security analyst meeting June 4.
The results were released after the markets closed Tuesday. Shares of HP rose 52
cents, or nearly 3 percent, to end the regular session at $20.50 on the New York
Stock Exchange. In after-hours trading, the shares slipped 90 cents.
For the first six months of fiscal 2002, HP reported net earnings of $736
million, or 38 cents per share, up from last year's figure of $188 million, or
10 cents a share. Sales for the half year were 15.9 billion, down from $17.8
billion last year.
---
On the Net:
By MAY WONG
AP Technology Writer
Copyright 2002 Associated Press, All rights reserved |
