Compaq Earnings Exceed Expectations

Compaq Computer Corp. boosted its earnings 9 percent in the second quarter, beating expectations by squeezing more profit out of each machine it sold.

The company’s top executive also forecast a strong second half of the year.

Compaq said Wednesday it earned $267 million, or 96 cents per share, in the quarter that ended June 30. That’s up from $246 million, or 90 cents per share, during the second quarter of 1995.

Since mid-June, the top-selling PC company has unveiled new models in its three largest-volume businesses - notebook PCs, desktop PCs for consumers and desktop PCs for businesses.

“We believe we are in an excellent position to gain market share and achieve improved profitability for the balance of the year,” said Eckhard Pfeiffer, president and CEO.

In other earnings reports:

The personal computer division of Olivetti & Co. SpA posted a second-quarter operating profit of 5.6 billion lire, $3.6 million, but the company Wednesday also predicted a continued slowdown in demand for its PCs.

The company, whose North American subsidiary is based in Spokane, said pre-tax profit was 1.1 billion lire, or $676,000, for the computer division, which was created at the start of this year.

Olivetti said about 340,000 PCs were sold in the first half of the year, up 17 percent from the comparable period in 1995. The rise was particularly driven by notebook PCs.

But the second quarter saw a “notable” slowdown in overall PC demand and the balance sheet gains were mostly from cost cutting, the company said.

ITT Corp. said its earnings rose 45 percent in the second quarter from a year ago, led by improvements in its hotel and gaming operations.

At the same time, the company said it postponed a previously announced plan to sell an additional 7.5 million shares.

ITT earned $96 million, or 81 cents a share, for the three months ended June 30, compared with pro forma earnings of $67 million, or 56 cents a share, a year earlier. The earnings were in line with expectations.