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HP Says Charges Drive $2 Billion Loss
 08/27/2002 SAN FRANCISCO (Reuters) - No. 1 PC and printer maker Hewlett-Packard Co. on Tuesday posted a massive $2 billion quarterly net loss owing to costs for merging with Computer Compaq Corp., but pleased Wall Street by saying consolidation plans are right on track. Shares of the Palo Alto, California-based company rose in after hours trading, buoyed by an operating profit that excluded charges and came in line financial forecasts. HP lowered its revenue outlook for the current quarter, bringing it in line with more pessimistic views on Wall Street, and blamed the revision on the weak economy, which many investors said was reasonable. "They are not trying to snow us," said Roy Papp, managing director of L. Roy Papp & Associates and an HP shareholder. He said the one quarter did not prove the merger would work, but it was a good sign. "They apparently did the things they said they would do," he said. HP reported a net loss of $2.0 billion, or 67 cents a share, in its fiscal third quarter, ended July 31. A year earlier, the combined operations of HP and Compaq would have reported a loss of $116 million, or 4 cents per share. The $18.7 billion merger of the two computing giants closed back in May. Excluding a number of items, primarily related to the merger, HP reported a profit of $420 million, or 14 cents per share, compared with a profit of $320 million, or 11 cents per share, a year earlier and in line with forecasts of Wall Street analysts polled by Thomson First Call. Third-quarter revenues eased to $16.5 billion from $18.58 billion last year. That was $200 million shy of the $16.7 billion in revenues that analysts had been expecting. News Archive | |
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