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HP 1Q Profits Fall 10 Percent

February 16, 2000

PALO ALTO, Calif. (AP) _ First-quarter profits at Hewlett-Packard Co. fell 10 percent amid higher costs of computer chips and weak demand for some products, though the technology giant still beat analysts’ expectations.

For the three months ended Jan. 31, Hewlett-Packard recorded operating earnings of 80 cents a share, or $794 million, compared with $960 million, or 92 cents a share in the year-ago period.

Analysts surveyed by First Call/Thomson Financial had been projecting earnings of 78 cents per share.

The results exclude the company’s expense from spinning off Agilent Technologies, its test and measurement products unit, last year. Including these costs, Hewlett-Packard earned 77 cents per share for the quarter.

First-quarter revenues grew 14 percent to $11.7 billion, compared with $10.2 billion in the year-ago period.

``This progress reaffirms the strategic choices were making, and we’re pleased with the market reaction to our accelerating pace,″ said Hewlett-Packard president and CEO Carly Fiorina. ``Were closing more and more deals, especially in the Internet and wireless arenas.″

Fiorina said 30 percent growth in the consumer market and significant rebound in Asia contributed to Hewlett-Packard’s revenue surge. The company’s important printer unit also posted sales gains of 13 percent for the quarter.

The increased sales helped to offset higher-than-expected computer memory and currency translation costs, as well as weakness in some areas, including Hewlett-Packard’s mid-range Unix computer server business.

The results were released after the finish of regular trading on the New York Stock Exchange, where Hewlett-Packard finished up $3.75 to $129.06 1/4. In light after-hours trading, shares were drifting higher to around $132.

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