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Compaq hits reduced Q4 targets
Difficult first half
Compaq hit its (reduced) Q4 targets but warns that a rocky road lies ahead for the industry in the first half of 2001.
Michael Capellas, Compaq's CEO, says the company remains comfortable with "analyst estimates of earnings per share growth in the 20-25 per cent range."
The world's biggest PC maker produced operating net income of $515 million on revenues of $11.5 billion for the quarter, but add in a one-off hit of $1.8 billion, mostly to cover the writedown of the company's holding in CMGI (acquired through the sale of AltaVista) and the company tumbles into a net loss of $672 million.
And, presumably on the back of strong server and storage sales, Compaq managed to screw out an extra 1.5 gross margin points (compared with Q4 1999), taking it to 23.7 per cent, and it managed to shave one full point off operating expenses.
Revenues in the quarter were up ten per cent on the same time this year - but that's after the multinational translates all its sales into dollars. The company points out that sale in 'constant currency' were up 19 per cent. Indeed it refers to 'constant currency' quite a lot in its press release announcing the Q4 results - as it makes growth look quite a lot better.
For the full year, revenue was $42.4 billion and net income was $1.7 billion. ®