Compaq saw its third quarter net income plummet 78 per cent to $115 million, but said the integration of Digital is on track and will return to form in the next quarter.
Compaq completed its acquisition of Digital in June, resulting in a $3.6 billion loss for the second quarter to 30 June.
This time worldwide sales leapt 36 per cent to $8.8 billion while channel sales grew by 38 per cent. Compaq claims this is more than twice the current market rate.
Earl Mason, Compaq's senior vice president and chief financial officer, said: "Progress in integration and operational initiatives can be seen on both the income statement and the balance sheet. Gross margins improved to 24.9 per cent, and the acquired services business had its strongest quarter in terms of year-over-year revenue growth in over five years."
On the balance sheet, cash stood at $4.4 billion after buying back around $180 million of Compaq's common stock and meeting $100 million of restructuring obligations.
Mason said that improvements in both days sales outstanding and inventory turns contributed to the strong cash position. He added: "During the fourth quarter, we will continue the [Digital] integration process, taking the necessary actions to achieve additional synergies."
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