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HP off but tops forecasts
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November 14, 2001: 12:08 p.m. ET
Computer maker sees drop but better-than-expected numbers boost stock.
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NEW YORK (CNN/Money) - Hewlett-Packard Co. Wednesday reported earnings tumbled in the latest quarter, though the computer and printer maker's results easily topped Wall Street forecasts.
Hewlett-Packard, whose planned acquisition of Compaq Computer Corp. has run into opposition from members of the Hewlett families, said it earned $361 million, or 19 cents a share, excluding special items for its fiscal fourth quarter ended Oct. 31. The results were well above average forecasts of 8 cents a share, according to First Call. HP earned $842 million, or 41 cents a share, excluding one-time items a year earlier.
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CNNfn's Amanda Lang takes a look at HP's better-than-expected numbers.
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Shares of HP (HWP: up $1.85 to $22.08, Research, Estimates), a component of the Dow Jones industrial average, jumped about 10 percent in morning trader. But an early rally on Wall Street ran out of gas and stocks were mixed in morning trading.
Including a $282 million charge for severance costs and other items, the Palo Alto, Calif.-based company reported net income of $97 million, or 5 cents a share, down from $922 million, or 47 cents a share, a year earlier.
Revenue for the quarter fell 18 percent to $10.9 billion from $13.3 billion. That also beat First Call's revenue forecast of $9.9 billion. The company said without the change in currency exchange rates sales would have been down 15 percent.
"Results were driven by excellent execution in imaging and printing and good performance in services," CEO Carly Fiorina said in a statement. "While overall computing systems results remain weak, we saw improvement in certain segments, including storage and PCs."
Hewlett-Packard said it expected fiscal first-quarter revenues to fall slightly from the fourth quarter in what it said was a normal seasonal decline. First-quarter margins and expenses would be flat compared with the fourth quarter, it said. It did not give specific earnings per share guidance for the first quarter or the new fiscal year.
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Fiorina defended the company's plan to buy Compaq, and said that opposition to the plan from children of co-founder William Hewlett did not change the outlook for the deal.
"I think it's important to remember that the approval of the merger is a process that we are not even half-way through," she said. "Despite the actions by some individuals, it is way to early to infer this merger will not occur."
She said she and other executives are meeting with children of HP co-founder David Packard to try to win their support of the deal despite doubts expressed by some of them. 
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