Compaq Third-Quarter Net Income Falls 78 Percent
HOUSTON (Reuters) - Compaq Computer Corp. (CPQ - news) said today third-quarter profits fell 78 percent to $115 million, but beat expectations, and that its integration of recently acquired Digital Equipment Corp. is on track.
The world's biggest personal computer maker said net income translated to 7 cents a diluted share, in the quarter, from $517 million, or 33 cents a diluted share, one year ago. Wall Street analysts had forecast net income of 6 cents a share.
Sales, at $8.79 billion, jumped 36 percent from the $6.47 billion Compaq reported last year, but fell short of the $9.0 billion level projected by analysts.
Houston-based Compaq, which has characterized itself as being in a ''transitional'' period following its $8 billion acquisition of Digital, said the blending of the two giant computer hardware makers is on track.
''The third quarter was the first full quarter of operating the combined companies of Compaq and Digital,'' Eckhard Pfeiffer, Compaq's president and chief executive, said in a statement. ''The Compaq team took decisive implementation steps during the
quarter to begin realizing synergies from the Digital acquisition.''
The company reiterated its belief that Digital will add to earnings as soon as the fourth quarter, noting that a significant portion of the integration of Digital's sales force has already been completed.
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