Compaq Computer last week reported fourth-quarter financial results that hewed closely to a reduced-expectations warning issued last month and said that it expects market conditions to be "difficult" during the first half of this year.
Lowered profit forecast
According to the company, revenue in the fourth quarter totalled $US11.5 billion, up 10 per cent year to year and slightly higher than the $11.2 billion to $11.4 billion that the computer maker predicted in December. The company's net operating profit was right in line with the lowered forecast for the quarter, coming in at $515 million.
A previously announced charge of $1.8 billion stemming primarily from a writedown of stock in Internet investment firm CMGI left Compaq with a $672 million net loss for the fourth quarter. Compaq got the CMGI stock in 1999 as part of a deal in which it sold ownership of AltaVista to the investment firm.
Michael Capellas, Compaq's chairman and CEO, said in a statement that enterprise-level sales and revenue growth overseas helped offset soft demand for PCs among North American users in the fourth quarter. But he added that the outlook for the hardware market as a whole "will be difficult in the first half of the year."
Compaq is just one of many technology vendors that have reported lower-than-expected financial results or warned that their numbers will be below plan. Last week, for example, PC rival Dell Computer disclosed that profits in its fiscal fourth quarter ending February 2 are expected to be about 33 per cent less than previously predicted.