HP dumps PwC acquisition plan

HP dumps PwC acquisition plan

Hewlett-Packard badly missed expectations for its fourth fiscal quarter, and has decided against acquiring PricewaterhouseCoopers' consulting business.

HP reported net income of $922 million, or 41 cents per share excluding one-time items, for the quarter ending October 31. The consensus from 14 analysts polled by First Call/Thomson Financial was that the company would post earnings of 52 cents per share.

Including one-time items, the company achieved earnings of 45 cents per share. This compares with earnings of 36 cents per share and net income of $760 million in the fourth quarter last year.

"We are ... very disappointed that we missed our EPS growth target this quarter due to the confluence of a number of issues ... . I accept full responsibility for the shortfall," said Carly Fiorina, the company's chairman, president and chief executive officer, in a statement.

HP blamed its woes on "margin pressures, adverse currency effects, higher-than-expected expenses and business mix," according to a company statement.

For the fourth quarter, HP reported net revenue of $13.3 billion, up 17 per cent from last year's $11.4 billion. Net revenue rose 15 per cent for the full fiscal year, from $42.3 billion to $48.8 billion.

Regarding the PricewaterhouseCoopers plan, Fiorina said in the statement "I am unwilling to subject the HP organisation to the continuing distraction of pursuing this acquisition any further."

HP plans to continue growing its consulting business and may acquire another company to do so, she added.

HP saw its highest growth during the fourth quarter in the Asia-Pacific region, where revenue rose 36 per cent to $1.9 billion. Europe posted a 15 per cent revenue increase to $4.5 billion, while US revenue jumped 13 per cent to $6 billion. The company's revenue in Latin America rose 11 per cent to $600 million.

HP's imaging and printing systems division grew its revenue by 6 per cent, while revenue in its computing systems division increased to 29 per cent. The IT services division grew its revenue 15 per cent.

For the full fiscal year, HP reported net income of $3.6 billion, up 15 per cent from 1999's $3.1 billion. Earning per share for the year rose to $1.73, a 16 per cent increase over last year's $1.49.

HP expects to increase its revenue 15 to 17 per cent in fiscal year 2001, the company said.

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