News

New HP Loses $2B in First Quarter as Combined Company

• By Scott Bekker
• August 28, 2002

The new HP saw revenues sink and weathered a large loss in its first financial quarter operating as the product of the controversial merger between computer giants Hewlett-Packard Co. and Compaq Computer Corp.

The company released its quarterly earnings report late Tuesday. The report, for HP's third fiscal quarter, which covers the period that ended July 31, was the first since the deal closed May 3.

Revenues for HP fell 9 percent compared with the combined results of Compaq and HP from the previous quarter in 2002. A similar fall in revenue appears when comparing the new HP's results with the results of Compaq and HP added together in the quarter that ended July 31, 2001. HP brought in $16.5 billion in the latest quarter. HP and Compaq had revenues above $18 billion in both Q2 2002 and Q3 2001.

Losses for the just-ended quarter approached $2.5 billion, which included $1.6 billion in restructuring charges and $1.4 billion in other merger-related charges. After adding in the tax benefit of losing that much money, the loss came to about $2 billion. That amounted to a loss per share of 67 cents. HP said it would have shown a profit of about 14 cents a share without the merger-related charges.

HP officials acted as if the numbers were positive.

"Throughout our first 100 days we've kept our eye on the ball," HP chairman and CEO Carly Fiorina said in a statement. "We're hitting on all our integration milestones and are on track to meet our second-half targets."