Dell, HP figures confirm gloom

US technology giants Dell and Hewlett-Packard last night reported figures which confirmed the parlous state of the industry. Dell also reduced expectations for the current quarter.

Hewlett-Packard reported an 89 per cent fall in pre-tax profits on the same quarter a year ago but still managed to beat industry forecasts driven down by dire warnings from the company last month, with the aid of cost-cutting.

The company, which employs more than 2,000 people at its plant in Leixlip, Co Kildare, manufacturing inkjet cartridges, saw net profit before one-time items in the third quarter fall to $218 million, or 11 US cents per diluted share from $1.04 billion, or 50 US cents per share a year ago, as revenue fell 14 per cent to $10.1 billion from $11.8 billion a year ago.

Hewlett-Packard announced on July 26th that it was cutting 6,000 jobs in its third round of cuts this year and said sales would drop 14-16 per cent in the quarter, more than double the 6 per cent decline expected by Wall Street at the time. But chairwoman and chief executive Ms Carly Fiorina warned in a statement that it would be 2002 before the industry saw improvement.

Dell fared worse, matching earnings forecasts but falling marginally short on revenues.

It also warned that sales in the third quarter might fall 5 per cent quarter-on-quarter, or be flat at best, at a time when they would normally be expected to rise.

Dell, which employs more than 5,000 people at plants in Bray and Limerick, saw its share price slip in after-hours trade after releasing the second-quarter figures showing a profit of $433 million, or 16 US cents per share, down from 22 US cents per share a year ago.