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Compaq, eMachines Post Poor Sales

7/26/2001 02:58:00 PM Eastern

New York - Compaq Computers and entry-level PC-maker eMachines posted their second quarter 2001 financial statements with Compaq tallying a $279 million loss and eMachines continuing to struggle with a net loss of $28.3 million.

Compaq loss came on sales of $8.5 billion and was primarily due to charges the company sustained in the quarter, ended June 30, but this was also the second quarter in a row it failed to make a profit. Without these charges a profit of $67 million was made, which led Compaq executives to have a bright perception of what the company accomplished during the past three months.

'I am pleased with the company's solid execution in this challenging environment. We delivered on our commitments to improve the company's business model and built momentum behind our services and solutions-led strategy,' said Michael Capellas, Compaq's CEO. Another plus for the company is its inventory reduction.

This year's performance is far different from 2000 when during the second quarter the company had a net income of $388 million.

Wayne Inouye, eMachines CEO, also put his best face forward after reporting his firm's loss, which took place on $115.9 million in sales in the quarter ended June 30. During the same period last year eMachines lost just over $62 million on sales of $124 million. He said the company's inventory situation is now under control and that 266,304 PCs were shipped during the past three months, down from the 326,128 shipped during the same period last year. The company third quarter prognosis sees eMachines continuing to cut its losses and becoming slightly profitable by the fourth quarter.

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