HEWLETT-PACKARD STOCK TUMBLES ON FOURTH-QUARTER EARNINGS WARNING

AP
The Columbian
10-28-1999
SAN JOSE, Calif. (AP) Hewlett-Packard Co. is warning Wall Street it is uncomfortable with current estimates for fourth-quarter earnings, prompting several analysts to sharply reduce their expectations.
Company chief executive Carly Fiorina in early October warned the massive 7.6 magnitude earthquake last month in Taiwan would affect sales and result in earnings at the low end of expectations, prompting Wall Street at the time to lower its earnings and revenue estimates.
But in calls made to analysts this week, company executives said even those lowered expectations were too high. Hewlett-Packard did not make a formal announcement of its earnings expectations for the fiscal quarter that ends Oct. 31.
But Merrill Lynch analyst Steve Milunovich said Wednesday in a daily report that "HP appears less comfortable with analyst estimates for (the fourth-quarter), based on our conversations with the company."
Milunovich slashed the company's per share earnings prospects by 5 cents, to 73 cents a share. He cut the company's prospects for revenue growth to 6 percent, or $10.8 billion, from its earlier projection of 10 percent growth, or $11.3 billion, in the quarter.
Hewlett-Packard Co. shares, which trade on the NYSE, closed at $67.00 Wednesday, down from Tuesday's $76.625 close. $00:9900088732: $199:A9900088732 $01:Copyright 1999 The Columbian Publishing Co. $02:$?
The Columbian $20:October 28, 1999, Thursday $30:Business; Pg. c1 $60:BUSINESS BRIEFING $90:from The Columbian and wire services $120:
ATLANTA
Coke studies how to make machines adjust prices
The Coca-Cola Co. is studying wireless technology that could allow bottlers to raise or lower soda prices by remote control at certain times say, during hot weather.
Lower prices during periods of slower sales would presumably bring in more business. Coke spokesman Ben Deutsch said Wednesday that the world's biggest soft drink maker has no immediate plans to put such a machine into the marketplace.
But The New York Times reported today that the company is testing a machine that can automatically raise prices for its drinks during hot weather. It also quoted chairman and chief executive M. Douglas Ivester's comments on the subject earlier this month to a Brazilian newsmagazine, Veja.
The desire for a cold drink increases during the summer heat, Ivester said, so "it is fair that it should be more expensive. The machine will simply make this process automatic."
WASHINGTON, D.C.
GAO: Army pays $50.6 million for faulty trailers
The Army spent $50.6 million for 6,700 two-wheeled trailers that now cannot be used unless the jeeps and trucks that pull them are modified, according to congressional investigators.
"Most of the 6,700 high-mobility trailers the army has purchased are not usable because of a safety problem and not suitable because they damage the trucks towing them," said the General Accounting Office, the auditing and investigative arm of Congress.
The Army plans to pay an additional $640 per trailer to correct the flaw, the GAO said in a report released Wednesday. The trailers were made by Silver Eagle Manufacturing Co. in Portland.
The GAO study said the Army found that the trailers could break, causing a safety problem. They could also damage the trucks that pull them. Most have been stored until modifications are made.
The Army wants to purchase 18,000 additional trailers. $00:9900088734: $199:A9900088734 $01:Copyright 1999 The Columbian Publishing Co. $02:$?
The Columbian $20:October 28, 1999, Thursday $30:Business; Pg. c3 $60:MCI WORLDCOM QUARTERLY PROFITS NEARLY TRIPLE $90:BRUCE MEYERSON, Associated Press writer $120:
NEW YORK -- Third-quarter operating profits nearly tripled at MCI WorldCom, the telecommunications juggernaut that's acquiring Sprint in the biggest corporate takeover ever.
The supplier of long-distance and Internet services said Thursday it earned $1.09 billion or 55 cents per share in the three months ended Sept. 30, excluding the impact of an investment in Embratel, a Brazilian telephone company.
That compares with a profit of $359 million or 19 cents a share in the same period last year from the combined operations of WorldCom and MCI Communications, which didn't complete their merger until the end of that quarter. The year-ago figures also exclude Embratel and merger-related costs.
Analysts had expected an operating profit of 54 cents a share in this year's third quarter, according to a survey by First Call/Thomson Financial. MCI WorldCom's shares jumped 5.5 percent after the report, rising $4.25 to $81.811/4 by late morning on the Nasdaq Stock Market.
Third-quarter revenues, excluding Embratel, totaled $8.52 billion, an improvement of 11 percent as compared with the combined $7.67 billion generated by the same operations in the third quarter of 1998. Including Embratel, revenue for the just-ended quarter totaled $9.2 billion.
The latest revenue tally reflects the loss of $29 million in service credits issued to customers in compensation for the widely publicized outages during August on one of the company's Internet "backbone" networks. The problems, caused by an upgrade to the system software running the network, were resolved after 10 days of disruptions, at which point MCI WorldCom granted 20 free days of service to about 3,000 business customers, including America Online.
The company also attributed its strong showing to savings on operating costs following the MCI merger, as well as the industry's shifting focus toward the volume of calling and Internet services being purchased rather than long distance vs. local access considerations.
While voice minutes increased 12 percent in the third quarter compared with the combined WorldCom and MCI operations in the same period last year, they continued to shrink as a percentage of the company's overall network volume.
Internet, data and other nontraditional telecom services now make up almost 40 percent of MCI WorldCom's total revenues, and account for more than three-quarters of the company's revenue growth. Internet usage, as measured by connect hours, increased 83 percent year-over-year.
"We continue to anticipate and respond to rapid change in our industry technology advances, regulatory change and most significantly customer expectations," said Bernard J. Ebbers, president and chief executive of MCI WorldCom.
Ebbers pointed to the record $115 billion deal signed earlier this month to acquire Sprint as another step toward meeting a growing preference for one-stop shopping for telephone and data services. The most crucial part of that purchase is the Sprint PCS wireless business, which will fill a gaping hole in MCI WorldCom's product lineup. $00:9900088735: $199:A9900088735 $01:Copyright 1999 The Columbian Publishing Co. $02:$?
The Columbian $20:October 28, 1999, Thursday $30:Business; Pg. c3 $60:MANY SEE LOTTERY, NOT SAVING, AS WAY TO WEALTH $90:ALICE ANN LOVE, Associated Press writer $120:
WASHINGTON -- Many Americans believe they stand a better chance of getting rich from lotteries or sweepstakes than from saving and investing, a poll found.
Stephen Brobeck, executive director of the Consumer Federation of America, said the findings suggest that misconceptions about how small amounts of money can grow if saved or invested may be preventing some people from taking steps to improve their lot.
"Most Americans are now aware of the consumer debt trap and the need to build wealth but don't believe they can do so," said Brobeck.
The federation and the financial services firm, Primerica, released the poll and a companion study of household wealth today.
An analysis of the latest Census Bureau data on household wealth from 1995 found that the median savings of American families, meaning half have more and half have less, was just $1,000.
That includes the value of money in the bank and stocks and bonds, minus household debts other than mortgages, such as credit card balances. Without subtracting debt, the median savings was $2,700.
Meanwhile, a telephone poll of 1,010 Americans 18 and older conducted July 22-25 found that most Americans undervalue the extent to which savings can accumulate over time. People were asked, for example, how much $25 invested weekly for 40 years at a 7 percent annual yield would amount to.
Fewer than a third guessed over $150,000. The correct answer is $286,640.
In a question designed to colorfully illustrate such misconceptions, the survey found that 27 percent of Americans believe that winning a lottery or sweepstakes is their "best chance to obtain a half a million dollars or more in your lifetime." $00:9900088739: $199:A9900088739 $01:Copyright 1999 The Columbian Publishing Co. $02:$?
The Columbian $20:October 28, 1999, Thursday $30:Business; Pg. c4 $60:AMAZON.COM LOSSES WIDEN IN THIRD QUARTER, RESULTS TOP ESTIMATES $90:RACHEL BECK, Associated Press writer $120:
NEW YORK -- Amazon.com's third-quarter results topped expectations, but its shares fell almost 7 percent this morning on worries about future performance.
Amazon.com's earnings report after markets closed Wednesday disclosed losses more than tripled from a year ago as the Internet giant significantly boosted its spending to expand its online offerings.
While its losses widened, Amazon.com's sales grew by 132 percent from the year-ago period and its customer base climbed by 2.4 million to 13.1 million, three times larger than it was in September 1998.
In trading today on the Nasdaq Stock Market, Amazon.com was down $4.933/4 at $71 a share at late morning after some influential Wall Street analysts lowered their ratings on the stock because of increased loss estimates.
Amazon.com reported that it lost $197 million, or 59 cents a share, in the three months ended Sept. 30, compared with a loss of $45.2 million, or 15 cents a share, in the year-ago period.
Excluding $111.3 million in merger, acquisition, investment-related costs and stock-based compensation charges, Amazon.com lost $85.8 million, or 26 cents a share.
That loss was smaller than the 28-cents-a-share loss expected by Wall Street analysts surveyed by First Call/Thomson Financial.
"I think that the third-quarter number was right on target," said Sara Zeilstra, an analyst at Warburg Dillion Read. "The concern right now has to do with the fourth quarter and year 2000 and how much the losses will widen."
Sales in the quarter rose to $355.8 million, up from $153.7 million a year ago. Since the start of the year, sales are $963.8 million, well above the $608 million in sales that Amazon.com tallied during all of last year.
In its four years in business, Amazon.com has yet to turn a profit. Yet, the company hasn't stopped spending money to build itself into a bigger and more diversified online retailer.
The Seattle-based company not only seeks to woo shoppers to its site, but it wants people to keep coming back. Repeat customer orders represented more than 72 percent of its orders during the third quarter, compared with 70 percent in the second quarter of this year.
In the past two years, Amazon has moved from being exclusively an online bookseller into an Internet shopping superstore, offering music, videos, auctions and electronic greeting cards.
During the third quarter, it added a wide array of toys and electronics to its Web site. It also started allowing anyone from major manufacturers to enterprising grandparents to sell merchandise on Amazon.com through its new zSHOPS program.
Amazon.com has also invested millions of dollars this year in a number of online merchants with big growth potential. Those include online pharmacy drugstore.com, Internet pet shop Pets.com and Web wedding-gift registry Della & James.
While Amazon.com has aggressively built itself up, its costs have soared. During the third quarter, the company spent $86 million on marketing and advertising and $44 million on product development.
The company said costs are likely to continue increasing. In the fourth quarter, Amazon.com expects its marketing expenses to rise as well as its costs to fulfill orders. $00:9900088741: $199:A9900088741 $01:Copyright 1999 The Columbian Publishing Co. $02:$?
The Columbian $20:October 28, 1999, Thursday $30:Business; Pg. c5 $60:SURVEY: ONLINE SHOPPING BETTER THAN MAIL-ORDER ONLY HALF OF THE TIME $90:ANICK JESDANUN, Associated Press writer $120:
NEW YORK -- Shopping online is preferable to using a mail-order catalog only about half the time, according to a Consumer Reports review of 25 retailers.
The survey in the November issue of the magazine recommends using the Internet to shop at 11 of the stores studied while sticking with catalog ordering for 12 others. Two retailers studied were toss-ups.
"With few exceptions, both the paper catalogs and the Web sites delivered the goods as ordered and on time," wrote the editors of the magazine, published by Consumers Union, a nonprofit product tester for more than 60 years. "The shopping experience was another matter."
The magazine said that some of the Internet shopping sites lacked information about security, return policies and shipping costs or made shopping tedious because of poor organization.
On the other hand, "all the paper catalogs were uniformly easy to page through and order from just what you'd expect from a highly refined shopping medium."
That finding came as little surprise to many online analysts, given that Internet commerce is relatively new.
"It takes awhile to learn how to run a business, fulfill orders and do customer service and all that," said Ken Cassar, an analyst with Jupiter Communications in New York.
Among the seven clothing merchants reviewed, J. Crew and Eddie Bauer got good marks for their Web sites' ease of use. Lands' End made up for inefficient navigation with useful features such as a gift finder and reminder. Eddie Bauer also won praise for an e-mail gift reminder.
The magazine, which rated the companies between July and September, recommended using mail order for four other clothing retailers: L.L. Bean, Victoria's Secret, Frederick's of Hollywood and Old Pueblo Traders. $00:9900088742: $199:A9900088742 $01:Copyright 1999 The Columbian Publishing Co. $02:$?
The Columbian $20:October 28, 1999, Thursday $30:Business; Pg. c5 $60:ABA OFFERS TIPS ON AVOIDING ONLINE RIP-OFFS $90:LAURIE ASSEO, Associated Press writer $120:
WASHINGTON -- More and more people are shopping on the Internet, and with the holiday season approaching, the nation's largest lawyers' organization is offering advice on how to avoid online rip-offs.
People need to develop instincts for shopping online similar to the instinct that "tells you you shouldn't buy a diamond ring from a roadside vendor," said Thomas Vartanian, chairman of the American Bar Association's cyberspace law committee.
The ABA on Monday unveiled a new Web site www.safeshopping.org that outlines ways consumers can try to minimize their chances of running into trouble on the Internet.
Among the Web site's suggestions:
* Look for symbols indicating the Web site uses security technology to protect purchasers' credit card numbers.
* Pay by credit card instead of a debit card or check. Using a credit card provides more legal protection if a dispute arises.
* Read the Web site's privacy policy to find out what information the seller is gathering from you, whether it sells the information to other companies, and how consumers can opt out of such information-sharing. People might not want to deal with a Web site that lists no privacy policy.
* Check the "feedback" areas of online auction sites, where customers discuss their experiences with sellers.
* Read the warranty before buying an item and check for limits on the company's liability if something goes wrong with the item.
* Make a printout of the Web page, the item being purchased, the warranty and any messages between the buyer and seller. If the date doesn't appear on the printouts, add it in writing.
Online shoppers are expected to spend about $9 billion on gifts during the coming holiday season, according to the market research company Harris Interactive of Rochester, N.Y. The company said about one-third of all people with Internet access are expected to buy something online this season, compared with about 8 percent last year.
In addition to security of credit card numbers, Vartanian said people need to be alert for "identity theft," in which someone uses another person's identity for a variety of transactions. $00:9900088744: $199:A9900088744 $01:Copyright 1999 The Columbian Publishing Co. $02:$?
The Columbian $20:October 28, 1999, Thursday $30:Sports; Pg. d1 $60:YANKEES BURN ATLANTA ONCE MORE $90:BEN WALKER, Associated Press writer $100:baseball $120:
NEW YORK -- What a way to say goodbye to a century of baseball: one of the game's greatest pitchers wearing the pinstripes of its greatest team in the most storied ballpark of them all.
Roger Clemens validated his greatness. And so did the New York Yankees.
With Clemens pitching shutout ball into the eighth inning, the Yankees became the first team in 60 years to sweep consecutive World Series with a 4-1 win over the Atlanta Braves in Game 4 Wednesday night.
"This must be what it's like to be a Yankee," said Clemens, who before the game gave a little pat to the monument honoring the most famous Yankee of them all, Babe Ruth. "This is what everybody said it was all about."
Clemens captured the only prize that had eluded him in his 16-year career as the Yankees won their record 25th World Series championship one quarter of the century's allotment and third in four seasons. They also won their 12th straight Series game, matching the mark set by their Murderers' Row teams.
"To do this on top of what we did last year, this is even better, I think," manager Joe Torre said. "We don't rest on our laurels. We went out and proved we belong here."
As did Clemens.
A five-time Cy Young winner with 247 lifetime victories, he had never won in the World Series. But that all changed once he arrived in the Bronx this spring in a trade for David Wells, a deal that Yankees fans disliked.
Booed at Yankee Stadium this year, Clemens went 14-10 with a 4.60 ERA and rarely showed the form that put him on the all-century team. But on a cool October night, he was in total command and, at 37 the same age John Elway was when he won his first Super Bowl earned his first ring.
Clemens walked off in the eighth to a huge ovation, tipping his hat and holding both arms high to acknowledge the cheers.
"It seemed like a perfect setup," Torre said. "I couldn't see it not happening tonight, not with the way his career had gone."
With the final out, Clemens bolted for the mound and, flanked by two of his sons, grabbed Torre in a bear hug that lasted a full minute.
Then, while his teammates were still dousing each other with champagne, Clemens sprinted back out to the field, climbed on the dugout roof and ran up and down, slapping every outstretched hand in the front row.
Clemens recalled seeing his teammates get their 1998 World Series rings in April, and being a bit envious.
"I was sitting there watching them receive them. They said, `We're going to get you one,"' he said.
With raucous fans waving yellow, plastic brooms all over the ballpark, Clemens outdueled John Smoltz.
Mariano Rivera, who had two saves and a win in the Series, got Keith Lockhart on a fly ball to end it and was selected MVP.
"Everybody talked about last year, but this is unbelievable, back-to-back," he said.
Owner George Steinbrenner's team finished off a week in which it simply overwhelmed the club that had best record in the majors. Along the way, the Yankees also:
n Became baseball's first repeat champion since Toronto in 1992-93.
n Posted the first set of consecutive Series sweeps since the Yankees in 1938-39. New York beat San Diego four straight last year, capping off a record 125-win season.
n Completed an incredible run in which they won 18 of 19 postseason games. The only loss came when Clemens was beaten by Pedro Martinez at Fenway Park 11 days earlier.
n Overcame a year of adversity, from Torre's prostate cancer in spring training to the death of outfielder Paul O'Neill's father early Wednesday. Scott Brosius and Luis Sojo also lost their fathers, Hall of Famers Joe DiMaggio and Catfish Hunter died and Darryl Strawberry was beset by health and legal problems.
For Atlanta, the loss was its record-tying eighth straight in the Series, a string that began in 1996 against the Yankees.
"I think they think in their minds that they had a tremendous year with all the ballclub went through," Braves manager Bobby Cox said. "They're disappointed just like I am."
After winning the title in 1995, the Braves had "Team of the 90s" engraved on their rings. Instead, they joined the New York Giants of 1910-19 as the only teams ever to lose four World Series in a decade.
"The best team won," Smoltz said. "The Yankees are head and shoulders above most when it comes to this time of the year. We lost to the best team, simply put.
"The Yankees are a model of how to win," he said.
Featuring a fastball in the mid-90s mph, Clemens struck out four and walked two in his first World Series victory he got two no-decisions in 1986 when his Boston Red Sox blew it against the New York Mets.
New York scored three times in the third. Chuck Knoblauch and Derek Jeter opened with singles and a one-out intentional walk to Bernie Williams loaded the bases.
Tino Martinez followed with a hard grounder and, perhaps screened by Williams, first baseman Ryan Klesko let the ball skip off his forearm for a two-run single. With two outs, Jorge Posada hit an RBI single.
Smoltz fanned 11 in seven innings, the most strikeouts in a Series game since Tom Seaver of the Mets had 12 in 1973.
Clemens took a two-hit shutout into the eighth, then the Braves nicked him with singles by Walt Weiss and Gerald Williams, and Jeff Nelson relieved.
After Bret Boone hit an RBI single, Rivera took over and kept the Braves from doing any more damage. He got Chipper Jones on a grounder with runners at the corners to end the inning, and pitched a scoreless ninth.
Rivera ended this season with 43 scoreless innings, and extended his postseason shutout streak to 252/3 innings.
As if for good measure, pinch-hitter Jim Leyritz launched a solo home run in the New York eighth off Terry Mulholland. Remember, it was Leyritz's homer off Atlanta relief ace Mark Wohlers in Game 4 in 1996 that turned the momentum in the Yankees' favor.
Notes
n The Yankees won 12 straight in the Series in 1927, 1928 and 1932.
n The Yankees also share the Series record of eight consecutive losses, doing it in 1921-23. The Phillies also lost eight in a row in 1915-50.
n Jeter has a 17-game postseason hitting streak, tying the record set by the Yankees' Hank Bauer in the World Series in the 1950s.
n Clemens is 3-3 in 12 postseason starts.
n Smoltz is 12-4 in postseason play.




Copyright 1999 The Columbian Publishing Co.