Compaq sales slump in Europe

Compaq has announced plans for an aggressive marketing push in Europe, the Middle East and Africa after sales in the region fell during its most recent financial quarter.

Revenue for Compaq's fiscal first quarter ending 31 March increased by one per cent to $9.51bn compared with the same period last year. Net income rose to $325m or 19 cents a share, compared with $281m or 16 cents a share in 1999.

Earnings per share remained flat at 16 cents, excluding an after tax gain of $44m relating to the company's investment portfolio. This met the consensus figure of analysts surveyed by researcher First Call.

Michael Capellas, Compaq's president and chief executive, said: "We do not underestimate the challenges that remain."

Europe, the Middle East and Africa was the only region that saw a sales decline, as revenue in North America and Asia Pacific grew by four per cent and 14 per cent respectively. "We are taking aggressive steps to re-ignite growth in Europe," said Capellas.

Compaq's consumer group, which develops printers and internet access tools, attributed the biggest growth, as sales rose by 35 per cent to $1.8bn. But sales in Compaq's commercial PC and enterprise solutions and services units declined.

Revenue in the enterprise solutions and services group, which markets servers, dropped by four per cent to $4.7bn, while sales of PCs fell by seven per cent year on year to $2.9bn.