Overall, the vendor plans 3,500 incremental job cuts by year’s end, as it continues to cut costs. The cuts are not part of the integration of Computer Computer Corp, which Compaq bought last year, and for which HP set a target of 17,000 job cuts. Taking into account additions at other units, total headcount should be down 800 on the year.

The additional job cuts were announced as the company unveiled its second quarter results. These showed revenues at $17.98bn, compared to last year’s $10.6bn. Operating profits were $643m, compared to $414m last year, while net earnings were $659m up from $252m a year ago. Earnings per share were $0.22, or $0.29 once charges were excluded. This topped analysts’ expectations by two cents. The 2002 figures do not include the results of Compaq Computer Corp, which HP took over in May 2002. In the first quarter of this year, HP’s sales were $17.88bn, with net income of $721m.

Carly Fiorina, HP’s chairman and CEO, said that looking ahead, the company saw no short term catalysts for improvement in IT demand. The company did not give guidance for the current quarter, but said it was comfortable with analysts’ estimates for the second half overall. This will mean full year earnings per share of $1.20, two cents better than current estimates.

All the vendor’s main units made a profit except ESG, which lost $7m, down from $83m in the first quarter. The company has been working hard to push the unit into the black, and has previously said this would happen in the second half of the year.

Yesterday, Fiorina said the company expected the enterprise unit to make a slight loss in the third quarter, before returning to solid profitability in the fourth quarter.

HP CFO Bob Wayman added that the ESG unit was speeding up its transition of the Alpha platform which it inherited through Compaq. This should be completed a quarter ahead of schedule.

HP restructured ESG earlier this month, consolidating its three hardware units into a single organization, and tightening the group’s links with HP’s services arm.

Source: Computerwire