Compaq Computer Corp. Wednesday posted sharply lower second-quarter profits and sales as the computer maker aims to turn itself into a services powerhouse amid economic strain and a PC price war.

The No. 2 PC maker's pro forma net earnings, which exclude one-time charges, fell to $67 million, or 4 cents per diluted share, from 21 cents per share in the period a year ago. Profit was also down from the previous quarter's $200 million, or 12 cents per share.

Sales fell to $8.45 billion in the quarter ended June 30 from $10.14 billion in the quarter a year ago and $9.2 billion in the fiscal first quarter.

The company confirmed preliminary figures Compaq announced two weeks ago along with new layoffs and details of its plans to focus on support services, a steadier and more profitable business, especially in economically unsteady times.

Analysts on average had expected earnings of 17 cents per share earlier in the year.