Compaq Results Hurt by Falling PC Sales

Compaq Computer Corp. on Tuesday reported an operating loss for the third quarter due to the economic downturn, the Sept. 11 attacks on New York and Washington, a typhoon in Taiwan, and its merger plans with Hewlett-Packard Co. .

Compaq -- the No. 2 manufacturer of personal computers -- also said that it expects the fourth quarter to be weak.

The Houston, Texas-based company said that it lost $120 million, or 7 cents a share in the third quarter, compared with earnings of $557 million, or 31 cents a share in the year-earlier period.

After Compaq pre-announced on Oct. 1 that it expected to post a loss in a range of 5 cents to 7 cents a share, analysts expected a 6 cent per share loss, according to Thomson Financial/First Call.

Compaq said that sales fell to $7.5 billion in the quarter, down from $11.2 billion in the year-ago period.