Increase in Compaq's earnings a surprise; computer makers have mixed results

Article Abstract:

Compaq reported an 8% increase in earnings for 1st qtr 1996, while Unisys suffered from a $13.4 million loss. The Compaq results surprised analysts, since the company had warned that slow US sales would lower earnings. Instead, promotions and price cuts in the US reduced inventory, and the company made $234 million, up from the $216 million earned in 1st qtr 1995. Revenues increased 42%, up from $2.96 billion to $4.2 billion. The gross profit margin fell to 21.1% in 1996, down from 24.5% in the same quarter in 1995. Some analysts fear Compaq will not be able to improve the margin because of falling prices on servers, but Compaq CEO Eckhard Pfeiffer claims the margins will improve due to the company's recent acquisitions of networking hardware vendors and with the advent of a new line of premium portable PCs in Jun 1996. Unisys' 1st-qtr loss came on revenues of $1.42 billion and contrasted with a $44.6 million profit in the same quarter in 1995.

Compaq Computer Corp., CPQ, Company sales/revenue, Company losses, Unisys Corp., UIS, Company earnings/profit

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Motorola earnings fall, missing forecast

Article Abstract:

Motorola reported a net income of $326 million for 2nd qtr 1996, down 32.2% from its 2nd qtr 1995 net income of $481 million, a drop the company attributes to weakening in sales of semiconductors and cellular-telephone equipment. For the 1996 quarter, revenue dropped less than 1%, from $6.88 billion in the prior-year quarter to $6.83 billion. Semiconductor sales fell to $2 billion, 5% below the 2nd qtr 1995 totals, and orders dropped 34%. Orders for cellular-telephone equipment dropped 5%, and sales totaled $2.8 billion, a 4% drop. Together, cellular-telephone equipment and semiconductor products make up between 55% and 60% of Motorola's total revenue. The messaging, information and media group saw sales rise to $1.1 billion, a 20% increase, and orders rose 4%. The company's net margin dropped to 4.8%, well below the 7.1% earned in 2nd qtr 1995. Cost as a percentage of sales increased, despite the company's overhead reductions.

Motorola Inc., MOT, Company Sales/Revenue, Company Earnings/Profit

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