Financial roundup: Compaq, Apple, Yahoo, AMD and eBay report earnings

Compaq Computer Corp. released its fourth-quarter earnings today, reporting revenue of $8.5 billion, up from $7.5 billion in the third quarter, but down 26% year-over-year. In the same quarter last year, Compaq reported revenue of $11.5 billion and a net loss of $672 million, or 39 cents per common share.

Net income for the quarter was $92 million, or five cents per diluted common share. Excluding a $36 million charge for merger-related expenses -- the company announced last year that it plans to merge with Hewlett-Packard Co. -- Compaq earned six cents per share.

"Our fourth-quarter results clearly demonstrate Compaq's strong focus on execution and solid market momentum," Michael Capellas, Compaq chairman and CEO, said in a statement. "Early last year, we outlined three strategic objectives for the company: extend our enterprise capabilities, grow and achieve critical mass in global services, and improve the economics of our PC business while increasing the velocity of our supply chain. There is still work to do, but we have made significant headway."

Earlier this month, Compaq said it expected to post a profit instead of its previously-expected loss on revenue of more than $8 billion, compared with the $7.6 billion to $7.8 billion forecast by analysts.

The company said this was the fourth consecutive quarter in which it had reduced operating expenses and the seventh consecutive quarter in which it had generated cash from operations.

In the statement, Compaq said there was continued growth in all its enterprise businesses, as well as its global services business and its European operations.

"While we did see some strengthening of the IT market in the fourth quarter, first-half growth will be moderate, and pent-up demand should drive a stronger recovery in the second half of the year. Accordingly, we expect first-quarter revenue of approximately $7.6 billion and [earnings per share] of 1 cent, consistent with normal seasonal trends," Capellas said.

Meanwhile, Apple Computer Inc. today announced that in its first quarter, it posted a net profit of $38 million, or 11 cents per diluted share. Those results compare with a net loss of $195 million, or 58 cents per diluted share, in the year-ago quarter. Revenue for the quarter was $1.38 billion, up 37% from the year-ago quarter, with gross margins at 30.7%, compared with a negative 0.1% in the year-ago quarter.

International sales accounted for 48% of the quarter's revenue, the company said.

The results included a $24 million restructuring charge related to targeted reductions in Apple's operations, information systems and administrative functions, and a $23 million realized gain from equity investments. These nonrecurring items had a net neutral impact on reported earnings per share.

Apple shipped 746,000 computers during the quarter. Moreover, the company "delivered a solid quarter and is one of the few companies making a profit in personal computers during these challenging times," said Apple CEO Steve Jobs. He pointed to the release during the quarter of the company's popular iPod MP3 music player, of which Apple sold 125,000 in two months. Jobs also pointed to the fact that Apple opened more of its retail stores. The company has 27 stores, which attracted more than 800,000 visitors last month.

"We're pleased to have delivered healthy results while maintaining lean channel inventories in a very challenging environment," said Apple Chief Financial Officer Fred Anderson. "Our balance sheet remains very strong, with almost $4.4 billion in cash. We are targeting March quarter revenues to be up sequentially to about $1.5 billion and [earnings per share] to be approximately flat with the December quarter."

Yahoo Inc. late today reported that its fourth-quarter revenue declined 39%, to $188.9 million for the three months ended Dec. 31, compared with $310.9 million in revenue in the fourth quarter of 2000.

Its so-called pro forma net income, excluding numerous one-time and special charges, was $16.7 million, or 3 cents per share, compared with $80.2 million or 13 cents per share in 2000.

Including special charges, the company lost $8.7 million, compared with $97.8 million in the year-ago period.

Sunnyvale, Calif.-based Yahoo's stock was up 58 cents per share, to $18.45, in early after-hours trading following the earnings announcement.

The company also announced that Jeff Mallett will step down as president and chief operating officer in April. He is leaving Yahoo to take advantage of greater flexibility for family and business interests, said the company.

Mallett will continue to serve as president and COO until he steps down, working with the management and operations teams to execute company strategy and facilitate a smooth transition. He will also continue as a member of the board of directors until Yahoo's annual stockholder meeting this spring.

Also today, Sunnyvale, Calif.-based Advanced Micro Devices Inc. reported it lost $15.8 million for the quarter ended Dec. 30 on sales of $952 million. The 5-cent-per-share quarterly loss was substantially less than the 18 cents expected by a consensus of analysts polled by Boston-based First Call/Thomson Finanical.

The company said it saw "record unit and record dollar sales of PC processors" in the quarter.

"Excellent market acceptance of the newly introduced AMD Athlon XP processor ... enabled AMD to turn in a strong quarter," W.J. Sanders III, chairman and CEO, said in a statement.

However, the company's fourth-quarter sales figures were down 19% from the same quarter a year ago.

Buoyed by brisk holiday sales, Internet auction site eBay Inc. reported strong fourth-quarter results yesterday, beating analyst expectations and allowing the company to predict on-target earnings for the first two quarters of 2002.

Still, eBay stock notched down in trading today, while investors worried that the site wouldn't keep up its momentum for the full year.

San Jose-based eBay reported consolidated net revenue of $219.4 million for the quarter ended Dec. 31, a 64% increase over the $134 million the company racked up in the year-earlier quarter.

Fourth-quarter net income came in at $25.9 million, or 90 cents per share, compared to profit of $23.9 million and 90 cents per share in the same quarter last year. Pro forma consolidated net income, excluding certain charges, was $38.5 million, or 14 cents per share. Analysts polled by First Call/Thomson Financial predicted pro forma earnings per share of 13 cents a share.

For the full year, eBay reported net revenue of $748.8 million, which it said represents 74% annual growth. Consolidated net income for 2001 was $90.4 million, or 32 cents per diluted share.

The auction site said that given its current results, it expects to meet revenue targets for the first half of 2002, reeling in anywhere from $490 million to $510 million, with pro forma earnings per share of 32 to 33 cents a share. The company added, however, that a continued weakness in the online advertising market will keep its ad revenue down.

Scarlet Pruitt, of the IDG News Service, contributed to this report.

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