Compaq turns the corner

Compaq easily topped Wall Street's fourth-quarter 2001 earnings expectations, taking $US92 million ($178 million) for the period.

The Houston-based computer maker, which informed investors last week it likely would make money, turned a profit of US5c per share, beating the US1c consensus of analysts surveyed by Thomson Financial/First Call.

The earnings figure includes a charge of $US36 million, or US1c per share, related to Compaq's pending merger with Hewlett-Packard.

Compaq's earnings were down 82 per cent from the $US515 million, or US30c a share, it made in the final quarter of 2000, not including a $US1.8 million writedown because of devaluation of its large stake in CMGI Inc.

Chairman and chief executive Michael Capellas also predicted Compaq would bring in about $US7.6 billion in revenue and earn a penny a share in the current quarter. Analysts anticipated a break-even period.

"While we did see some strengthening of the (information technology) market in the fourth quarter, first half growth will be moderate and pent-up demand should drive a stronger recovery in the second half of the year," Capellas said.

The company, which entered the year struggling with slow computer sales, shed 8500 jobs in a massive restructuring. On the year, the company lost $US563 million, compared to a $US595 million profit in 2000.

Revenues for the October-December quarter of 2001 totaled $US8.46 billion, down 26 per cent from the $US11.48 billion in sales it posted in the last three months of 2000.

Full-year revenues totaled $US33.55 billion, down 21 per cent from the $US42.22 billion that came in during 2000.

News source: News Interactive - Compaq turns the corner

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