Compaq Computer yesterday lowered its sales and earnings forecasts for the second quarter, as the second biggest personal computer maker, which employs 2,200 between Dublin, Galway and Belfast, was hit by the triple-whammy of an industry-wide slowdown, fierce price competition, and a weakening European market.
Revenue for the second quarter will be about $8.4 billion (€9.83 billion), down 9 per cent from the first quarter, primarily due to weaker sales in Europe, Compaq said.
To shore up profits, the company said it would expand job cuts this year to total 8,500, up from the 7,000 jobs it targeted earlier.
Compaq said it now expects second-quarter earnings on an operating basis of four cents per share. That was down from the five cents a share the company had estimated in April and well off the 17 cents Wall Street had hoped for earlier this year.
"We are committed to taking aggressive actions during this period of slow demand to make permanent improvements in our business model," said Mr Michael Capellas, chairman and chief executive.
The company is taking an additional restructuring charge of about $490 million in the second quarter, related to the additional job cuts. Compaq has cut 3,500 jobs this year. The shares fell 44 cents yesterday to close at $13.76 on the New York Stock Exchange.
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