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

To: MeDroogies who wrote (359)	5/13/2002 3:12:55 PM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 4345

Reuters Company News HP, Dell results to reflect tech spending downturn By Caroline Humer NEW YORK, May 13 (Reuters) - Weak corporate spending is expected to take its toll when Hewlett-Packard Co. (NYSE:HPQ - News) and Dell Computer Corp. (NasdaqNM:DELL - News) report quarterly results later this week, although HP's bottom line should benefit from cost-cutting ahead of buying Compaq Computer Corp. Palo Alto, California-based HP, which makes computers and printers, will report on Tuesday its final quarter without Houston-based Compaq. HP, which waged an extended battle with dissident shareholder Walter Hewlett over its Compaq deal, cut costs during the quarter and is due to post higher earnings even as revenues fell. Meanwhile, Round Rock, Texas-based Dell, which lost its standing as the No. 1 personal computer maker after HP vaulted past it with the acquisition of Compaq, used its direct business model to keep prices low and increase market share during the quarter. Dell and HP are also expected to give some insight into corporate technology spending, although HP is seen keeping guidance on HP's and Compaq's future combined earnings to a minimum. Other technology companies have painted a mixed picture of spending on new technology. The world's largest computer company, International Business Machines Corp. (NYSE:IBM - News), for instance, has painted a bleak picture of tech spending and is expected to make one of its largest work force reductions in a decade this quarter. IBM hosts a meeting for Wall Street analysts on Wednesday. WAITING FOR WORD ON CORPORATE DEMAND Dell, meanwhile, is due to report on Thursday earnings for its first fiscal quarter of 16 cents a share on revenue of $7.8 billion, down slightly from a year earlier, according to Thomson Financial/First Call. Dell told analysts to expect a decline of 3 percent to 5 percent in revenues in February, or in a range of $7.66 billion and $7.82 billion. "We expect them to post strong unit sales and continue to gain share, both in the consumer and corporate space," said Gerard Klauer Mattison & Co. analyst David Bailey. "Obviously, the pricing environment remains fairly aggressive in an attempt to generate demand, so we are looking for relatively flat revenue sequentially and earnings to be down just a touch," Bailey said. With consumer spending expected to follow historical trends and decline in the next two quarters, Dell will rely more on corporate customers, who already make up the bulk of its revenues, Bailey said. "We would expect them to say the IT demand outlook remains relatively soft," Bailey said. In one sign of Dell's move to diversify its revenues away from PCs and computers, the company on Monday said it has begun selling a digital projector, a move it signalled last month. Lehman Brothers analyst Dan Niles said he expected little change in Dell's outlook for IT spending to see a mild recovery later this year and a full recovery by the middle of 2003. HP's LAST QUARTERLY STAND HP, meanwhile, is reporting its last quarter as a stand-alone company. Its May 3 purchase of Compaq came after the close of its second fiscal quarter on April 30, requiring it to report quarterly results for the HP company alone. Compaq reported its first-quarter results last month. Analysts say that despite the protracted proxy battle between HP management and dissident shareholder Walter Hewlett during the quarter, HP's revenues were in line with expectations and will have declined to $11.09 billion from $11.6 billion a year earlier, according to Thomson Financial/First Call. "Our channel checks reveal that the company's quarter -- despite the distractions from the lawsuit, integration planning and a continuing weak spending environment -- appears to be on track to meet revenue guidance of "modestly down sequentially", Sanford C. Bernstein analyst Toni Sacconaghi said. Extensive cost cutting, however, helped HP's bottom line during the quarter, Sacconaghi said. He sees earnings of 29 cents per share on revenue of $11.2 billion. Analysts expect earnings of 25 cents per share, up from 17 cents per share a year earlier, according to Thomson Financial/First Call.