HP reaffirms forecast, but PC sales hit a speed-breaker

SAN FRANCISCO: Number three personal computer maker Hewlett-Packard Co. said

on Thursday its US sales of personal computers were slower than expected but

reaffirmed revenue and earnings expectations for fiscal 2001.

The company said it expected revenue growth of 15 per cent to 17 percent for

the 2001 fiscal year ending October 31, 2001, and it was comfortable with Wall

Street consensus estimates for the first quarter ending January 31 of earnings

at 44 cents a share.

"Unlike some of our competitors, HP is far more than a US-centric

consumer PC company, with less than 10 per cent of our business in this

segment," chairperson Carly Fiorina said in a statement.

Fiorina said that the company had planned only single digit growth in US

retail personal consumer sales for next year but also said sales had still

failed to meet expectations.

"While softness in that market has been somewhat greater than we had

originally anticipated, we are still experiencing growth over record fiscal 2000

sales levels and our sales this Thanksgiving week were ahead of last year,"

she said.

Personal computer maker Gateway Inc. stunned the market on Wednesday by

saying holiday sales had started off slowly on the Thanksgiving weekend.

Analyst Toni Sacconaghi of Sanford Bernstein said it was not clear if the HP

statement would calm market fears.

"What is not mentioned is that consumer PCs in aggregate contributed

28.5 per cent of HP's growth in fiscal year 2000," he said. "We are

and have been cautious. The 15-17 per cent growth feels aggressive, especially

as PC sales decelerate.

(C) Reuters Limited 2000.