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HP predicts rosy growth
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April 13, 1999: 6:20 p.m. ET
Computer maker expects double-digit growth in PC shipments for year
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NEW YORK (CNNfn) - The head of Hewlett-Packard Co. said Tuesday the computer maker is on track to achieve double-digit growth in worldwide personal computer shipments in 1999, a rosy prediction that sharply contrasts with rival Compaq Computer Corp.'s recent profit warning.
Hewlett-Packard's revenue for the second-quarter, which will end April 30, should exceed the 2 percent growth recorded in the first quarter, said Lewis Platt, HP's chairman and chief executive officer. At a news conference at the New York Stock Exchange, he also said growth in the second half of 1999 would be stronger than in the first half.
"I feel pretty good about things," he told CNNfn's "In the Game." "Things appear to be on track."
In a statement issued by the company later in the day, HP said it expects to achieve 6 to 8 percent growth in overall revenues for the year, an estimate in line with Wall Street analysts' forecasts.
That statement was released in an effort to correct an erroneous comment made by Platt earlier in the day that the company would enjoy double-digit growth in overall revenues in 1999.
HP optimistic about the PC
As competition heats up in the personal computer market and prices drop, PC makers are seeing an ever-shrinking profit margin. But Platt said Hewlett-Packard (HWP) continues to be optimistic about the future of the PC.
"I think the PC is going to be around for a long time," he said. "It's growing. It's profitable."
Compaq (CPQ), the world's largest computer maker, said late Friday that its first-quarter earnings would come in at only about half of what analysts had anticipated, citing lower profit margins on PCs. Hewlett Packard quickly responded Monday that it was not seeing any similar weakness.
Leading with servers
Hewlett-Packard held the news conference Tuesday to introduce a new class of powerful computers, called servers, designed for large corporate networks. The line will compete with those already produced by Sun Microsystems (SUNW) and IBM Corp. (IBM).
"We think it's going to thrust us into a position of real leadership that frankly we haven't been in before in this market," Platt said.
Platt also said the company was seeing better performance in its Asian operations as that region slowly recovers from its economic crisis.
"Almost month by month we're seeing sequential growth," he said. "That's going to help us generate some good growth later in the year."
Investors cheered the rosy predictions, sending Hewlett-Packard stock up 2-7/16 to close at 70-13/16 Tuesday.
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Hewlett-Packard
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