Economy stalled until 2002, says Compaq

More doom and gloom as Compaq sees no recovery in sight

Compaq chief executive Michael Capellas has said the economy will not recover until at least the second half of 2002, and has warned that the vendor could post fourth-quarter losses.

The firm posted turnover of $7.5bn (£5.2bn) for its third quarter ended 30 September, compared with $11.2bn the year before. It posted a loss of $120m; it made a $557m profit in 2000.

"The third quarter was one of the most challenging ever for Compaq," said Capellas. "IT demand weakened globally, resulting in aggressive pricing, while the events of 11 September created logistical challenges."

Lucent reported $5.2bn turnover for its final quarter last week, down 28 per cent on the year before, and a loss of $909m.

Turnover fell 26 per cent to $21.3bn for financial year 2001, with operating losses of $4.7bn.

However, restructuring charges following a period in which the workforce was cut from 106,000 to 77,000 [CRN, 18 July] resulted in a one-off charge of $8bn, making the overall loss for the year $8.8bn.

Lucent aims to further reduce its staff to between 57,000 and 62,000 by the end of 2002.