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Hewlett-Packard Fiscal Q4 Home PC Sales Drop 37%

11/14/2001 12:03:00 PM Eastern

Palo Alto, Calif. - Faced with an ongoing tough economic environment, home personal computer revenue at Hewlett-Packard declined 37 percent year over year during its fiscal fourth quarter, yet generated profit in North America. Notebook computer revenue declined 12 percent year over year, said the company.

Remaining convinced that its $22 billion acquisition of Compaq Computer remains a "unique opportunity to move HP into the future," chairman/CEO Carly Fiorina pronounced improvement in HP's home PC segment - namely a 23 percent fourth-quarter revenue gain, compared with the third, and a 10 percent sequential revenue growth in notebooks. "While overall computing systems results remain weak, we saw improvement in certain segments, including storage and PCs," she said.

In addition, the imaging and printing systems segment, which includes laser and inkjet printers, enjoyed a 16 percent sequential revenue increase, while posting a 9 percent revenue decrease for the fourth quarter, compared with the same three months in 2000.

However, HP, overall, took it on the chin in the fourth quarter ending Oct. 31, reporting net earnings of $97 million, down a whopping 89 percent from the $922 million recorded in the year-ago three months. Pro forma earnings this quarter excluded a $282 million pre-tax restructuring charge for workforce reduction.

Net revenue for the fourth quarter dropped 18 percent, to $10.9 billion, compared with $13.3 billion in the same quarter last year. Gross margin in the fourth quarter was 25.7 percent, down 30 basis points from the 26 percent recorded in the same quarter last year on a pro forma basis.

For the fiscal year, HP recorded a 7 percent dip in net revenue, down to $43.2 billion, from $48.9 billion the previous year. Net earnings were off 89 percent for the 12 months, down to $408 million, from $3.7 billion the prior year.

Looking ahead, HP expects economic conditions to remain difficult going into 2002. This should lead to a slight decline in fiscal first-quarter revenue, compared with the fourth quarter, it said. HP also predicts first-quarter margins will essentially remain unchanged, compared with the fourth quarter.

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