Compaq today reported year-on-year increases in both net income and revenue for its fourth fiscal quarter, ended Dec. 31, 1998.
The Houston-based computer vendor reported after-tax profit of $758 million, or 43 cents per diluted share on revenue of $10.86 billion, compared with $667 million, 42 cents per share and $7.32 billion, respectively, in the corresponding quarter in 1997.
Following several quarters of losses and lower year-on-year earnings, the record results are a "key milestone" in Compaq's integration of Digital, and allow the company to enter 1999 with a "great deal of momentum and optimism," said Eckhard Pfeiffer, Compaq's president and CEO. Compaq completed the Digital merger, valued at $9.6 billion, in June of 1998.
For the full year, however, mainly due to charges related to the Digital acquisition, Compaq reported a net loss of $2.74 billion, or $1.71 per diluted share, on revenue of $31.17 billion. In 1997, Compaq turned in a net profit figure of $1.86 billion on revenue of $24.58 billion.
On the upside, operating expenses, which had been high as a result of integrating the two companies, finally declined in the fourth quarter, to 18% of the revenue, compared with 23% for the immediately prior quarter, the company said.
In addition, Compaq's sales through its distribution channels grew 43% year-on-year during the last quarter; a rate that the company said was over three times higher than the overall market.
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