Features

SAN JOSE — In the first financial results since closing its merger with Compaq Computer Corp., Hewlett-Packard Co. said third-quarter sales fell short of expectations though the integration of the companies remains on track. 

The Palo Alto, Calif.-based company blamed the lower revenue on weak demand for technology by businesses and consumers, not problems in its corporate marriage. 

The merger with Houston-based Compaq closed on May 3 after a ferocious proxy battle. HP earned $420 million, or 14 cents per share — compared to $320 million, or 11 cents per share, by the companies a year ago. 

Revenue was $16.5 billion, down about 11 percent from $18.6 billion reported by the companies a year ago. 

Analysts were expecting a profit of 14 cents per share on sales of $16.7 billion, according to a survey by Thomson First Call. 

Even under the best economic conditions, large corporate mergers are never easy. In HP’s case, executives face not only the challenge of integrating products, accounting systems and employees but also weak demand for the computers, software and services the company sells to businesses and consumers. 

When the merger was announced almost a year ago, the companies said they would cut 15,000 positions, or 10 percent of the combined work force of 150,000. In June, executives predicted merger-related savings of $2.5 billion in 2003 and $3 billion by 2004. 

On Tuesday, the company said it has so far completed nearly 4,740 job cuts and is on track to trim 10,000 by the end of fiscal 2002.