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Technology Stocks : Hewlett-Packard (HPQ) -- Ignore unavailable to you. Want to Upgrade?

To: BelowTheCrowd who wrote (144)	5/7/2002 7:49:20 PM
From: Lynn	Respond to of 4345

HP Says Business Kept Coming as Merger Closed By Peter Henderson PALO ALTO, Calif. (Reuters) - Hewlett-Packard Co. (NYSE:HPQ - news) and acquisition Compaq Computer Corp. on Tuesday said customers had kept buying despite eight months of uncertainty over the $18.7 billion merger, which was marked by one of the most bitter proxy battles in corporate history. ADVERTISEMENT Seeking to put aside doubts the contentious combination had cost the new Hewlett-Packard market share, the company said it had booked over $5 billion in orders to major corporations in the past three months. "We think customers understand this merger very well," HP Chief Executive Carly Fiorina told a news conference to mark the launch of the merged company. HP also rolled out its merged product plans on Tuesday, which unexpectedly included both HP- and Compaq-branded personal computers for the consumer market. Executives also said they would cut most of 15,000 jobs that they had planned to eliminate in nine months and could save more than the $2.5 billion promised in cost-cutting. HP said it would sell Compaq PCs to corporations, as expected. Michael Winkler, worldwide operations chief, said Compaq would be kept along with HP as a consumer retail brand. Compaq could be aimed toward the home-office segment while HP was sold for gamers and home entertainment, he said. Martin Reynolds, an analyst from Gartner Inc. research, said that HP would be better able to fend off Sony Corp. (Tokyo:6758.T - news), which would have had an easier way into the market if HP had withdrawn. "They've done everything they can to stack the deck in favor of a successful merger," he said. As part of its merged product lines, HP said its Jornada handheld computer would be dropped in favor of Compaq's iPAQ, HP's line of server computers running Intel Corp. (NasdaqNM:INTC - news) chips would bow out to Compaq's and elements of Compaq's Unix operating system would be folded into HP's HPUX, which is being moved to chips from Intel. International Data Corp. analyst Jean Bozman gave HP credit for slimming the product offerings, a key barometer for the early success of the company's integration efforts. "They did make some of those crisp decisions," she said. Fiorina said eight months of strife as the companies fought a divisive proxy battle and then defended the merger vote in court had given management time to focus. "People know what they are accountable for in this first half. All of which is to say, we are ready," she said at a news conference. Now begins the business of blending two companies with 150,000 employees and around $80 billion in annual revenues, as well as the fight for market share with competitors like No. 1 computer maker International Business Machines Corp. (NYSE:IBM - news) $5 BILLION IN ORDERS Chief Financial Officer Bob Wayman stuck to predictions that HP would be able to cut $2.5 billion in costs after combining the companies. He also said on the sidelines of the conference that some internal estimates of cheaper procurement costs and other programs projected savings ran as high as $3.4 billion to nearly $4 billion. "Those are the best cases that I've seen so far in terms of cost savings," he said. "We believe there is an opportunity to capture more than the $2.5 billion in savings." Capellas in an interview said that the $5 billion in orders showed customers were standing by HP. "That is a lot in a market where IT enterprise spending has been depressed," he said. He said that keeping both brands in consumer channels would be attractive to retailers assuming HP used its new, larger scale to cut retailers' costs and that the two brands distinguished themselves from one another. That low-cost philosophy was central to the argument Capellas and Fiorina made in September, when they announced plans for the merger. Fiorina argued on Monday, as she has before, that the information technology industry was ripe for consolidation and HP would lead the way. "The IT industry will never return to the heady days of 20 and 30 and 40 percent growth," she said. "It is an industry that will consolidate and HP is leading the consolidation." She also said HP had decided on a new name for the Compaq sporting arena in San Jose. "It is not going to be the Fiorina," she joked. "It is going to be the HP Pavilion." biz.yahoo.com