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

To: PCSS who wrote (2269)	11/20/2002 5:39:55 PM
From: Night Writer	Read Replies (1) \| Respond to of 4345

H-P Profits Top Expectations SAN FRANCISCO, Nov 20, 2002 (AP Online via COMTEX) -- Hewlett-Packard Co. on Wednesday delivered a quarterly profit that indicated its contentious $19 billion takeover of Compaq Computer is progressing better than skeptics predicted. The Palo Alto-based company earned $390 million, or 13 cents per share, in the three months ended Oct. 31. If HP and Compaq had been together at the same time last year, the company would have lost $505 million, or 17 cents per share in that year-ago quarter. If not for accounting charges unrelated to HP's ongoing business, the company said it would have earned 24 cents per share. That topped the consensus estimate of 22 cents per share among analysts polled by Thomson First Call. HP's quarterly revenue also exceeded expectations, totaling $18 billion. The consensus analyst estimate was $17.3 billion. The performance represented a measure of redemption for HP executives and directors who overcame stiff shareholder resistance spearheaded by the family of the company's founders to buy Compaq six months ago. "We think we are right where we need to be," Robert Wayman, HP's chief financial officer, said during an interview Wednesday. "We still have a lot of work to do, but we have made a lot of progress in the first six months. I think we are even running a little ahead of schedule." HP disclosed its results after the market closed. The company's shares gained 30 cents to close at $16.85 on the New York Stock Exchange, then added an additional $1.55, or 9 percent, in after-hours trading. The surge in extended trading pushed HP's shares above their price when the Compaq takeover closed in early May. Industry analysts warn it's still far too early to declare HP's takeover a success. The company still faces a possible backlash from employees and distributors who might rebel against some of the changes brought about by the Compaq deal. HP also lost a vital cog in the deal earlier this month when former Compaq CEO Michael Capellas resigned as HP president to take the helm at bankrupt WorldCom Inc. Capellas' departure threatens to erode the already fragile morale of the combined work force, said industry analyst Steve Kleynhans of the Meta Group. "The merger and the turmoil that emerges from it is not over. It's going to take at least another year before we really know how this is working, Kleynhans said. HP is confident the two businesses will continue to mesh. The company reaffirmed the consensus earnings estimate of 27 cents per share for its current quarter ending in January. HP's printing and imaging business propelled the company in the last quarter. The division registered an operating profit of $926 million on revenue of $5.6 billion, up from an operating profit of $490 million on revenue of $5 billion last year. The company's personal computer division continued to struggle amid fierce competition and reduced demand. HP's personal systems group suffered an operating loss of $87 million on revenue of $5.05 billion, an improvement from an operating loss of $377 million on revenue of $5.4 billion. The consumer PC market was particularly weak, with HP's sales in this segment plunging by 13 percent from a year ago. PC sales to businesses remained unchanged from last year, HP said. On the cost-cutting front, HP had eliminated 12,500 jobs since buying Compaq, about 2,500 more than management had promised at this juncture. HP plans to jettison another 5,400 jobs during the next year. That's about 25 percent more than HP had projected three months ago. The purge has helped reduce HP's overhead by $651 million so far, ahead of management's projection of $500 million. --- On The Net: By MICHAEL LIEDTKE AP Business Writer Copyright 2002 Associated Press, All rights reserved