Compaq Profit Surges Beyond Forecasts
Compaq Computer Corp. said Wednesday that its fourth-quarter earnings rose 43%, far exceeding estimates, on increased sales of computers to corporate customers and improvements in operating efficiency.
The No. 1 personal computer and server maker said net income rose to $462 million, or $1.64 a share, from year-earlier profit from operations of $323 million, or $1.17. Revenue rose 15% to $5.42 billion from $4.7 billion.
Compaq’s results exceeded all but the most optimistic forecasts, demonstrating the increasing strength of personal computer makers as companies shift from mainframe computers to networks of PCs.
Houston-based Compaq shares jumped $4.875 to close at $83.375 on the New York Stock Exchange.
Wall Street was expecting earnings of $1.53 a share, based on the average estimate of analysts. Many analysts had increased their unofficial forecasts to be about $1.60 in recent weeks.
Houston-based Compaq said its closely watched gross margin--revenue minus the cost of manufacturing computers--rose to 24.4%, its highest level in almost two years.
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Arlington, Va.-based USAir Group Inc.’s fourth-quarter profit dropped by more than half, hurt by high costs and increased competition from low-cost airlines, the company said.
USAir earned $27.2 million, or 8 cents per share, in the last three months of 1996, a 55% slide from earnings of $60.3 million, or 54 cents, in the same period a year earlier.
The results were below analysts’ expectations.
Revenue climbed 11% to $2.05 billion from $1.85 billion.
“Our unit costs remain the highest in the industry and seriously restrict our ability to compete with expanding low-cost carriers,†said USAir Chairman and Chief Executive Stephen M. Wolf. He cited competition from Southwest Airlines and Delta Air Lines’ discount Delta Express carrier in particular.
At a Glance:
Bristol-Myers Squibb Co. said booming sales of its cholesterol and cancer drugs helped offset its plummeting blood pressure medicine, advancing the company to a healthy $716 million in fourth-quarter profit. Net income amounted to $1.43 per share, besting analysts’ expectations by 2 cents per share. In the fourth quarter of 1995, Bristol lost $142 million, or 28 cents, after deducting expenses of breast implant lawsuits and a corporate restructuring.
Conrail Inc. said it posted a fourth-quarter profit of $147 million, or $1.86 a share, compared with a loss of $30 million, or 43 cents a share, a year earlier.
General Dynamics Corp. said earnings declined 20% in the fourth quarter, reflecting the company’s exit from aircraft manufacturing. Net income for the quarter fell to $70 million, or $1.11 per share, from $88 million, or $1.40, a year earlier.
Unisys Corp. said it earned $55.7 million, or 15 cents per share, in the fourth quarter, rebounding from a loss a year earlier, after job cuts and a restructuring that split the company into three businesses. A year ago it reported a loss from continuing operations of $667 million, or $4.06.
Computer Sciences Corp. said third-quarter profit climbed 26% to $57.4 million, or 73 cents a share, up from profit from operations of $45.7 million, or 59 cents, a year earlier.
California Micro Devices Corp. reported third-quarter net income of $79,000, or 1 cent a share, compared with net income of $2.9 million, or 24 cents, in the year-ago quarter.
Signet Banking Corp. said fourth-quarter profit rose to $33.6 million, or 55 cents a share. In the year-ago period, profit was $9 million, or 15 cents, after a charge of $35 million.
Great Western Financial Corp. fourth-quarter earnings fell 14% before charges and gains to $85 million, or 58 cents a share, from $98.6 million, or 66 cents, a year ago.
Amoco Corp. reported a 55% gain in fourth-quarter earnings of $781 million, or $1.56 a share, up from $504 million, or $1.02 a share, a year ago.
Tosco Corp. reported that fourth-quarter net income fell to $30.2 million, or 67 cents a share, from $33.8 million, or 90 cents, a year ago.
Dean Witter Discover & Co. said fourth-quarter earnings rose 28% to $227.8 million, or 68 cents a share, from $178.1 million, or 51 cents, a year earlier.
Allegheny Teledyne Inc.’s fourth-quarter earnings rose 31% to $68.2 million, or 40 cents a share, from pro forma profit from operations of $52.1 million, or 30 cents, in the year-earlier quarter.
Weyerhaeuser Co. said fourth-quarter earnings totaled $98 million, or 50 cents a share, compared with $251 million, or $1.25, in the year-earlier period.
Louisiana-Pacific Corp. had a fourth-quarter loss of $14.7 million, or 14 cents a share, compared with net income of $26.8 million, or 25 cents, in the year-ago quarter.
Read-Rite Corp. reported better-than-expected first-quarter earnings of $5.8 million, or 12 cents a share, from $42.6 million, or 88 cents, in the year-earlier period.
Mylan Laboratories Inc. said fiscal third-quarter earnings fell 18% to $18.1 million, or 15 cents a share, in the quarter ended Dec. 31, from $21.9 million, or 18 cents, in the year-earlier quarter.
Borland International Inc. reported a third-quarter loss from operations of $17.5 million, or 48 cents a share, compared with net income of $1.1 million, or 3 cents, in the year-earlier period.
ETrade said net income for the fourth quarter rose to $2.26 million, or 7 cents a share, from $878,000, or 3 cents, in the year-earlier period.
E.W. Scripps Co. said fourth-quarter net income totaled $50.3 million, or 62 cents per share, up from $40.5 million, or 51 cents, in the year-ago period.
Robert Mondavi Corp. said second-quarter net income totaled $9.2 million, or 59 cents per share, compared with $8.1 million, or 52 cents, in the year-ago quarter.
Legato Systems Inc. said fourth-quarter net income grew 73% to $3.4 million, or 18 cents pers share, compared with $2.0 million, or 11 cents, a year ago.
Callaway Golf Co. reported fourth-quarter net income of $25.5 million, or 36 cents per share, compared with $23.3 million, or 34 cents, a year ago.
