So, maybe us little guys who are telling their family and friends NOT to buy
hp is hurting them?

I can't trust HP anymore so I won't buy their products, or compaq!

-----Original Message-----
From: Tom Brandt [mailto:[log in to unmask]]
Sent: Wednesday, August 20, 2003 9:46 AM
To: [log in to unmask]
Subject: [HP3000-L] NYTimes on HP's quarterly results


Carly is criticized for promising more than she delivers.

===================================================================

Hewlett Profit for Quarter Falls Below Expectations

August 20, 2003
  By ALEX BERENSON

Hewlett-Packard's road to recovery took a detour yesterday
as the giant computer company reported that its profit for
the quarter ended July 31 fell short of analysts'
predictions.

Sales also came in below expectations, and would have
actually fallen except for weakness in the dollar, which
meant that foreign sales appeared higher in dollar terms,
the company said. In addition, Hewlett-Packard projected
that its sales and earnings for the current quarter, which
ends in October, would probably fall short of Wall Street's
estimates.

Hewlett-Packard also said it would reduce its worldwide
work force of 140,000 by 1,300 employees, on top of cuts of
3,500 people it announced during the most recent quarter.
The cuts will be a mix of buyouts and layoffs, the company
said.

The report, released after the close of regular trading at
4 p.m., sent Hewlett-Packard's shares down more than 11
percent in after-hours trading. Shares had risen 27 percent
this year, as investors lauded the company's efforts to cut
costs after its much-criticized acquisition of Compaq
Computer in May 2002.

Based in Palo Alto, Calif., Hewlett-Packard, which has had
$71.8 billion in sales in the last 12 months, is a leading
maker of computers and printers as well as a big provider
of information technology services. But the company has
steadily lost ground to Dell Computer in the individual and
small-business market.

Hewlett-Packard blamed weak sales and low prices of
personal computers for its shortfall. Hewlett-Packard's
sales of server computers for small and medium-size
businesses were also below expectations, the company said.

"The third quarter is always tough, but we still should
have done better," Carleton S. Fiorina, the company's chief
executive, said in a statement. In a conference call with
analysts and investors after the earnings call, Ms. Fiorina
said that spending on computers and computer services
seemed to have stabilized in the United States and most of
the rest of the world. Europe remains weak, she said.

"We don't see a rapid upturn in information technology
spending," Ms. Fiorina said.

Hewlett-Packard's strongest segment, as usual, was its
printing business. The company said sales of printing
equipment and supplies rose 10 percent, to $5.24 billion,
and operating profit was $739 million. Even there, though,
the news was not all good, as operating profit margins fell
to 14 percent, from 18 percent in the period a year
earlier. The company said that decline had been expected
and was the result of higher spending on marketing and
sales.

For the quarter ended July 31, its fiscal third quarter,
Hewlett-Packard reported sales of $17.35 billion, compared
with $16.54 billion in the quarter a year earlier. But the
gain came entirely from the weaker dollar, which made
overseas sales appear stronger, the company said. If the
dollar had remained stable, Hewlett-Packard's sales would
have fallen 2 percent.

"Their challenge right now is to grow the top line, or
revenue - that's their biggest challenge," said John B.
Jones Jr., managing director at Soundview Technology Group.
Mr. Jones said that Ms. Fiorina, who has sometimes been
criticized for promising more than Hewlett-Packard
delivers, was aggressive and capable, and had made the
company more competitive. But he said she had lost
credibility with Wall Street because she did not always
acknowledge the company's weaknesses, preferring to put the
brightest spin on results that have sometimes been uneven.

"What the investment community is looking for is a little
more objectivity," Mr. Jones said.

Hewlett-Packard reported a profit of $297 million, or 10
cents a diluted share, under standard accounting rules,
compared with a loss of $2.03 billion, or 67 cents a
diluted share, for the period a year earlier. Factoring out
certain one-time charges, the company said it had a profit
of $858 million, or 23 cents a diluted share, compared with
a profit of 14 cents a diluted share for the quarter a year
earlier and 29 cents a diluted share for the second
quarter.

Factoring out those charges, Wall Street analysts had
expected that Hewlett-Packard would have per-share earnings
of 26 cents for the quarter, so the company fell three
cents short. The shortfall came even though analysts have
steadily reduced their estimates for the company's profit
for the quarter, according to IBES, which compiles
forecasts. Hewlett-Packard estimated its tax rate would be
only 19 percent during the quarter, well below the
estimates it had used in the second quarter and the same
period in 2002.

In addition, Hewlett-Packard said it expected sales for the
fiscal fourth quarter of $18.8 billion to $19.1 billion and
per-share earnings before one-time charges of 34 to 36
cents. Analysts had forecast earnings of 36 cents and sales
of $19.1 billion, according to IBES.

http://www.nytimes.com/2003/08/20/technology/20HEWL.html?ex=1062398110&ei=1&
en=1cd8751b872d663d


Copyright 2003 The New York Times Company


--
Tom Brandt
Northtech Systems, Inc.
130 S. 1st Street, Suite 220
Ann Arbor, MI 48104-1343
http://www.northtech.com/

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