H-P warns earnings will miss estimates; price cuts in PC industry shave profit margins even as sales increase
Article Abstract:
HP's projected earnings of around 65 cents for the fiscal 2nd qtr 1998 fall well short of First Call's analyst consensus of 77 cents. The printer and computer maker also expects difficult conditions for much of 1998 largely because of continued PC price reductions. HP shares, meanwhile, have risen more than 30% since Apr 1998 because of analysts's optimism about new orders. The May 15, 1998, announcement marks the fifth consecutive quarter in which HP has disappointed Wall Street expectations, but the company has avoided the price crunch affecting most other PC manufacturers. Sales are expected to improve by 16% over the 2nd qtr 1997, but profit margins eroded as HP cut prices to compete with rivals such as industry leader Compaq. HP, the third-largest PC maker, said it has slashed some of its business PC prices by up to 20%. The company also blamed the setback on slowing growth in its test and measurement business.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1998
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PC growth is different in 2 surveys
Article Abstract:
The US PC market is continuing to grow, but market researchers disagree over the growth rate. International Data reports sales of six million PCs in 2nd qtr 1996 and an 18 percent growth rate, compared with last year's same period. Dataquest reports sales of 5.6 million systems for the quarter and a 12 percent growth rate. Dataquest also reports a 16.5 percent increase in global sales and the shipment of 15.9 million PCs. This means the US market accounted for 35 percent of the global market. The global market's growth rate slowed from 18.4 percent in 1st qtr 1996. Dataquest expects a 19 percent global growth rate for the year and a 13.6 percent increase in the US market. International Data predicts a 16.9 percent increase in the US market, but does not estimate global sales. Rapidly declining prices and a new version of Windows NT are expected to stimulate PC sales through the rest of 1996.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1996
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PC industry is underwhelmed by network machines; feared onslaught is hardly in evidence at Comdex computer show
Article Abstract:
The Comdex computer trade show presented no evidence that network computers will soon replace PCs, despite predictions to the contrary made throughout 1996. With PCs in 40% of US households and many more in businesses, the PC market is too well established to be vulnerable to immediate extinction. The network computer, as promoted by advocates such as Sun and Oracle, is designed to allow users to download programs from a central corporate network or the Internet only when needed, thus avoiding the expense and time required to maintain individual PCs. Less radical versions of the network computer may find a market. Citrix Systems, for example, has developed WinFrame software, which runs on low-end PCs connected to a centrally controlled server using a Windows OS. IBM's version of the network computer will be used for data entry on mainframes.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1996
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