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Big Rise in Orders Boosts Hewlett-Packard's Results

August 20, 1986

Hewlett-Packard's profit rose 6% to $123 million in its third fiscal quarter as incoming orders rose a strong 25%, the maker of computers and scientific instruments said Tuesday.

The Palo Alto-based company said its revenue in the quarter ended July 31 rose to $1.79 billion from $1.61 billion.

Incoming orders in the quarter rose to $1.85 billion from $1.48 billion in the same quarter in 1985, as domestic orders were up 9% and foreign orders 51%, the company said.

Analyst Timothy McCollum of the investment firm Dean Witter Reynolds said Hewlett-Packard's earnings were in line with expectations.

But he said he remains neutral on the stock because of his expectations that the company's new line of Spectrum computers will not be a big boost to earnings until late in 1987.

"While business has improved, we remain cautious," John Young, Hewlett-Packard's president and chief executive, said in a statement. "Capital spending by our customers is still sluggish, and we see no indication of a significant turnaround."

Young said the company is in a good position to take advantage of any upturn in business conditions. Hewlett-Packard previously announced incentives to encourage employees to take voluntary severance or early retirement. About 1,000 workers are expected to participate in the cost-cutting program, the company said.

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