|
Hewlett-Packard
reported first-quarter profits above Wall Street expectations
it had raised a week earlier, as consumers snapped up personal
computers and printers. The Palo Alto, California-based company
said the results proved the management’s case that it
can successfully integrate takeover target Compaq Computer,
but it tempered expectations for the current quarter, saying
consumer spending could slow and earnings would fall slightly.
 |
|
Bob
Wayman
|
HP
posted a net profit of $484 million, or 25 cents per diluted
share, for the first quarter ended January 31, up from $141
million, or 7 cents per share, in the year-earlier quarter.
Excluding one-time items and accounting adjustments, HP posted
a profit of $564 million, or 29 cents per diluted share, compared
with $812 million, or 41 cents per share, in the year-ago
quarter. Sales though fell to $11.4 billion from $12.4 billion
in the year-earlier quarter.
Analysts polled by research firm Thomson Financial/First Call
had forecast operating earnings of 18 cents to 27 cents per
share on sales of $11.1 billion. On February 4, HP had said
it would substantially beat the existing consensus of 16 cents
per share.
Kevin McCloskey, a portfolio manager at Federated Investors
in Pittsburgh who is wary of the merger, said the results
topped expectations but did not convince him of the merits
of the $22.5 billion deal. “HP has some good business,
Compaq has some decent business and they think putting one
and one together gets two or maybe even three. But I’d
say we’re not that positive that would happen.”
Hewlett-Packard said the strong personal computer sales to
businesses and consumers returned the total PC business to
profit, and digital imaging and outsourcing showed strength.
Chief financial officer Bob Wayman said HP’s two-and-a-half
year campaign of cost cutting was finally paying off. “We
have been working and working on getting expenses sized to
the changed environment and then you see a little bit of an
uptick in revenue, and voila, you see a big improvement in
the bottom-line,” he said on a conference call with investors.
|
