Compaq Computer Corp. today released financial results for the third quarter ended Sept. 30, reporting revenue of US$7.5 billion, a year-over-year decrease of 33 percent. Net loss from operations came to $120 million for the quarter, or 7 cents per diluted common share.
"The third quarter was one of the most challenging ever for Compaq and for our industry," Chairman and CEO Michael Capellas said in a statement. "IT demand continued to weaken globally, which resulted in aggressive pricing, while the events of September created significant logistical challenges. We did, however, see positive momentum in our Global Services business, and our enterprise technology performed well, given overall market conditions."
The company reported progress in cutting costs. During the quarter, inventory was reduced by $600 million, operating expenses decreased sequentially by more than $100 million, and the company generated cash from operations for the sixth consecutive quarter.
Third-quarter operating expenses totaled $1.6 billion, a decrease of $289 million from the same period in 2000, Compaq said.
The company's operational results exclude net investment losses of $514 million, primarily related to Compaq's investment in CMGI Inc. Compaq acquired the assets in a noncash exchange for a majority stake in AltaVista Co. in 1999. Including this amount, the company reported a net loss of $499 million, or 29 cents per diluted common share.
Looking ahead, Capellas said, "We do not anticipate dramatic changes in corporate IT spending, particularly through the first half of 2002. As for the fourth quarter of 2001, we expect revenue to be in the range of $7.6 to $7.8 billion and a loss of about [3 cents] per share."
Hewlett-Packard Co. announced early last month that it plans to purchase Compaq in a deal valued at the time at $25 billion.