February 20, 1991

The Hewlett-Packard Company today reported unexpectedly strong earnings, attributing the gain to sales of new products and cost-cutting efforts. Analysts said the quarter's strong results could mark the end of a malaise gripping the computer company that last year prompted the return of its co-founder and chairman, David Packard, to active management. The numbers were well above Wall Street analysts' estimates and sent the company's stock soaring $5.50, or 13.7 percent, to $45.625, on the New York Stock Exchange. The stock was the Big Board's third most active, with a volume of 2.7 million shares, and the percentage gain was within the top 10 for the day. New Machines Due Analysts said the stock move also reflected anticipation that new line of computer work stations to be introduced soon would be owerful and competitive.

The judge who sentenced Michael R. Milken to 10 years in prison in November recommended yesterday that the former financier be eligible for parole after serving three years. The decision, announced by Judge Kimba M. Wood at a hearing in Federal District Court in Manhattan, was the first official indication of the amount of prison time that Mr. Milken, whose pioneering use of "junk bonds" fueled many big corporate takeovers in the 1980's, would likely serve.

The Supreme Court agreed today to decide whether New York's "Son of Sam" law, intended to limit the ability of criminals to profit from selling their stories to book publishers or movie makers, violates the First Amendment's guarantee of freedom of expression. The 1977 law, inspired by the serial Son of Sam murders that gripped the state that year, led 34 other states to pass similar laws. They acted in response to a public outcry over the prospect that criminals could sell their stories for profit while their victims went uncompensated. Board Distributes Profits The New York law forbids book and magazine publishers, as well as movie, television and radio producers, to pay a person for contributing to a work that "re-enacts" a crime, or recounts "thoughts, feelings, opinions or emotions" about it, if that person has been accused or convicted of the crime.

The Soviet peace initiative seems to present President Bush with a painful choice: pushing for an all-out military victory over Iraq or nurturing a diplomatic settlement that might get the Iraqis out of Kuwait but also allow President Saddam Hussein to save enough political face to preserve his Government. Mr. Bush has been keeping his own counsel as he wrestles with what aides say could be his most difficult challenge: how to appear open to a peaceful solution without letting Mr. Hussein gain politically on the virtual eve of what would likely be his military defeat. As one Administration official put it today: "If Saddam accepts this Soviet proposal we have a real problem."

Fanuc Ltd. of Japan, one of the world's leading producers of machine tools and robots, announced today that it had decided not to buy a stake in a Connecticut machine tool builder that helps make nuclear weapons for the Government. After reports in January that the White House staff had approved the Japanese investment in Moore Special Tool Inc., many members of Congress complained about the deal, arguing that it could place decisions critical to American national security in foreign hands. The Fanuc statement today, issued through the Washington law firm of Arent, Fox, Kintner, Plotkin & Kahn, left little doubt that the lawmakers' reaction figured in the Japanese company's surprise decision.