By Timothy Prickett Morgan
Hewlett-Packard Co held its annual meeting on Wall Street last week, and this time around over 300 anxious, intrigued or relieved analysts showed up to get the word from soon-to-be- leaving CEO Lewis Platt. The company said that it expects revenues to grow in the low double digits during the second half of the year, and that there is no indication of a Y2K slowdown as yet – a cautious opinion that competitor IBM is also holding for the moment as we enter the last two quarters of the century. Specifically, HP said that it is guessing sales will be up about 13% for its fiscal third quarter and 14% for its fiscal fourth quarter, with overall revenues for fiscal 1999 (ended October 31) up around 8% or so. This is a decent improvement over the anemic 2% growth HP had in the first half of its fiscal year.
HP reiterated that Unix server revenues should be up significantly as N class and V class servers start shipping in volume this week or next. Platt said that the Computer Products division, which comprises PCs, servers and storage, had its fourth consecutive profitable quarter, and that sales of its Pavilion line of home PCs were exceptionally strong, average PC selling prices were leveling out rather than dropping and that PC server sales were accelerating.
The company said that it expects the separation of its Computer and Imaging company from its Test and Measurement company will cost about $200m over then next few quarters. However, HP added that capital spending was running below expected levels, down to an estimated $2bn for the year compared to a planned $2.2bn – just enough to cover the write-offs associated with the split.
