Patience with H-P may be running out; expenses worry analysts as firm against misses estimates
Article Abstract:
HP's quarterly slump continued unexpectedly through the 2nd qtr 1998, leading some investors to question the prestigious electronics company. Net income for the period ended Apr 30 totaled $685 million, or 65 cents a diluted share, representing a 13% decline from the 2nd qtr 1997's $784 million. By comparison, sales jumped 16%, from $10.34 billion to $12.04 billion. HP's revenue and profit have grown by an average 15% since 1997, but the company has failed to meet Wall Street expectations since Nov 1996. Problems for the 2nd qtr 1998 began with a loss in PC sales despite a shipment growth that had exceeded 70%. Analysts also expressed concern at expenses rising from 22.7% of revenue in the 1st qtr 1998 to 24.5% in the 2nd qtr 1998. The results surprised HP, which had anticipated a turnaround in the week preceding the quarterly announcement.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1998
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Hewlett's quarterly profit rose only 1%; revenue gained a slim 5% but cost cuts helped results beat forecasts
Article Abstract:
HP's 3rd qtr 1998 earnings of $621 million, or 58 cents a diluted share, puzzle analysts. The total represents only a 1% gain from the 3rd qtr 1997's $617 million, or 58 cents a diluted share. A First Call consensus of analysts had projected a per-share profit of 54 cents, but estimates fell from 61 cents after HP had warned of lower earnings in Jul 1998. The weak sales, coupled with new order growth of only 1%, worry most analysts. Revenue growth through the 3rd qtr 1999 will grow by only 8% to 12%, according to HP executives. Earlier projections called for a 15% gain. Analysts are optimistic about several new products in key business areas as well as a company spending improvement. Asian economic problems and PC price reductions have wounded the electronics giant, which relies on printers for nearly 50% of its revenue.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
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