Compaq’s Profit Beats Estimates

Compaq Computer said Wednesday that it boosted earnings 9% in the second quarter, beating expectations by squeezing more profit out of each machine it sold.

The Houston-based company’s top executive also forecast a strong second half of the year, giving a lift to the company’s stock. Compaq shares closed up $3.25 to $48.25, a 7% gain, in trading on the New York Stock Exchange.

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

Sales were up 14% to $4 billion for the quarter, compared with $3.5 billion a year ago.

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

Compaq’s gross margin returned to 23% after dropping to 21% in the first quarter, when the company cut prices to meet a sales growth target of 35%.

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USAir Group, sharing in the boom times for the airline industry, reported its second-quarter profit rose 94% to $178.3 million, or $1.91 a share, after payment of preferred share dividends.

The Arlington, Va.-based airline said earnings would have been higher--more than double those of last year--if the company had not set aside $41.2 million to cover obligations to its employees under a 1992 profit-sharing plan. In the second quarter a year ago, USAir earned $91.8 million, or $1.11, after payment of preferred share dividends.

The USAir earnings report comes as the company negotiates with its unions for possible wage and work rule concessions to position the airline for sale or future growth. USAir Chairman Stephen M. Wolf has told employees and stockholders the airline must grow to survive, probably through an alliance or merger with another airline.

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Hotel franchising company HFS said its second-quarter earnings nearly doubled from the same period last year, reflecting its entry into the residential real estate business.

HFS earned $38.7 million, or 31 cents a share, in the three months ended June 30, compared with $20.2 million, or 19 cents a share, a year earlier.

The latest results were depressed by a restructuring charge of 3 cents per share involving its division that owns the former Coldwell Banker company-owned real estate offices.

Without the charge, its earnings per share amounted to 34 cents, slightly above the 32 cents analysts had expected.

At a Glance:

Glendale Federal said earnings in the fourth quarter rose 53% to $18.5 million, or 22 cents per share, with strong growth in services for consumers and small businesses, compared with year-ago quarter earnings of $12.1 million, or 18 cents. Also reporting was Los Angeles-based SunAmerica, which said it posted record earnings of $69.7 million, or 98 cents per share, compared with $48.3 million, or 70 cents, for the year-ago period. Also, Sanwa Bank California said it earned $16.4 million for the quarter, compared with $13.8 million last year.

Unisys, as expected, reported an 86% drop in second-quarter profit, to $5.3 million, compared with $39.8 million a year ago. The performance amounted to a loss of 14 cents per share after the payment of preferred dividends. That contrasts with a profit of 6 cents a share last year.

Foodmaker said its fiscal third-quarter profit more than doubled as more customers visited its Jack in the Box restaurants. Net income at the San Diego-based chain rose to $5.52 million, or 14 cents a share, from $2.62 million, or 7 cents, in the year-earlier period.

America West Airlines said the second quarter was its most profitable period ever, with net income from operations of $29.5 million, or 60 cents a share, compared with $20.9 million, or 46 cents, a year ago.

Greyhound Lines reported a smaller second-quarter loss of $5.53 million, or 10 cents a share, from $9.88 million, or 18 cents, a year earlier.

Wang Laboratories said its profit grew 44% in the fourth quarter to $8.2 million, or 13 cents per share. A year ago, it earned $5.7 million, or 9 cents.

Computer Sciences said its fiscal first-quarter earnings rose 20% to $33.2 million, or 58 cents a share, from $27.7 million, or 49 cents, a year ago.

Kimberly-Clark said its second-quarter profit rose 18.6% to $364.7 million, or $1.30 per share, up from $307.4 million, or $1.10, a year ago.

AirTouch Communications said its second-quarter profit rose 58% on a record number of new cellular subscribers, to $61.2 million, or 12 cents a share, from $38.7 million, or 8 cents, in the year-ago period.

Colgate-Palmolive said profit rose 4% in the second quarter to $148.9 million, or 98 cents a share, from $143.2 million, or 95 cents, a year earlier.

ITT said its earnings rose 45% in the second quarter to $96 million, or 81 cents a share, compared with pro forma earnings of $67 million, or 56 cents, a year earlier.

Fruit of the Loom said its second-quarter profit rose 20% to $47.8 million, or 63 cents a share, from $39.7 million, or 52 cents, a year earlier.

Anheuser-Busch said its second-quarter earnings rose 7.1% to $353.4 million, or $1.41 a share, from $330 million, or $1.27, a year earlier.

DuPont reported a 7% rise in second-quarter earnings of $1.04 billion, or $1.84 a share, up from $967 million, or $1.75, a year earlier.

Planet Hollywood International said second-quarter earnings rose 21% to $11.1 million, or 11 cents a share, from net income of $9.2 million, or 11 cents, a year earlier.

AMC Entertainment reported a loss of $177,000, or 10 cents a share, contrasted with a year-earlier profit of $4.4 million, or 16 cents.

Sunbeam said second-quarter earnings dropped 36% to $7.2 million, or 9 cents a share, from $11.4 million, or 14 cents, from the same period a year ago.