Compaq Reports First Quarter Profit

The Houston-based company said Thursday it earned $44 million, or 3 cents a share, compared with a loss of $131 million, or 8 cents per share, in the first quarter of 2001. The year-ago quarter was adjusted to reflect a $222 million charge required by a change in accounting standards.

Excluding charges relating to its pending merger with Hewlett-Packard, the company earned 4 cents per share. The consensus of analysts surveyed by Thomson Financial/First Call was that Compaq would make a penny per share.

"Our first quarter results continue to demonstrate Compaq's strong focus on customer success, on winning in key markets and on execution during what continues to be a challenging economic environment," said Michael Capellas, Compaq's chairman and chief executive officer.

Compaq said earlier this month that it expected to meet or beat analysts' expectations for the first three months of the year.

Revenue was $7.7 billion, down 16 percent from the $9.2 billion in the January-March period last year.

Compaq and Palo Alto, Calif.-based HP could close their proposed $19 billion merger soon. The deal, enthusiastically supported by Compaq investors, is thought to have narrowly won the support of HP investors at its hotly contested shareholders' meeting last month.

Shares of Compaq closed at $10.82, up 14 cents, on the New York Stock Exchange, before the earnings were released. The shares fell 7 cents in after-hours trading.

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