THREAD --- Before the bell ---Hewlett-Packard Falls in Europe After Profit Warning (Repeat)
Bloomberg News
May 14, 1998, 4:58 a.m. PT
Hewlett-Packard Falls in Europe After Profit Warning (Repeat)
(Repeats to spell out Hewlett-Packard in headline.)
London, May 14 (Bloomberg) -- Hewlett-Packard Co. shares
traded in Europe plunged after the computer maker said yesterday
its fiscal second-quarter profit will fall short of analysts'
expectations, hurt by falling prices for its personal computers
and slower sales of measurement devices in Asia.
The shares traded in London plummeted 10 to 71 5/8,
according to Madoff Securities International Ltd. H-P said it
expects to earn 65 cents a diluted share in the quarter ended
April 30, including charges totaling 8 cents to 10 cents a
share. Analysts expected the company to earn 78 cents a share,
according to IBES International Inc.
The profit warning shows that Hewlett-Packard succumbed to
the PC price cuts that have hurt rivals including No. 1 PC maker
Compaq Computer Corp., which slashed prices this year to clear
out excess inventory. Investors had driven H-P's shares up 32
percent in the past three months amid optimism that the company
was faring better in the PC price wars.
''Compaq is killing them,'' said Kim Brown, an analyst at
research firm Dataquest in San Jose, California. ''H-P needs a
growth vehicle, and they are struggling to find it.''
H-P will report second-quarter earnings Friday. The company
earned $784 million, or 75 cents a diluted share, a year ago.
Hewlett-Packard also said profit was hurt by economic
weakness in Asia, where once-strong economic growth has stalled
because of a debilitating financial crisis. Sales of H-P
measurement devices, which carry higher profit margins than PCs,
were especially hard hit in Asia, H-P said.
Among other computer related companies, Compaq Computer
Corp. dropped 1/2 to 31 1/4, Digital Equipment Corp. fell 1/2 to
59 and International Business Machines Corp. slipped 3/4 to 120
1/4.
--Nicola Hobday in London (44 171) 330 7636 and Anthony Effinger
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P.S. I like the part where CPQ is killing them --- maybe they will all wake up soon and start making some money in selling PC'S |
