Indigo made a loss in the third quarter on lower than anticipated revenue and growth.

Despite this setback it is confident that the fourth quarter, which is historically the firms best, will be profitable, although it will not produce an overall profit for the year.

"The third quarter was under our expectations for revenue and 5% lower in growth," said chief financial officer Alon Bar-Shany.

Revenue for the quarter was up 14% to 30.1m ($44.1m) with a loss of 4.8m compared to 1.6m last year.

The firm attributed the loss to 1.4m of costs due to Print 01, 1m from its proposed acquisition by Hewlett-Packard, and a 680,000 increase in bad debt reserves due to the slowdown in the US economy.

The firm expects to complete the HP deal in the first quarter of next year and claims to be unaffected by the concerns of some HP shareholders and analysts over the IT firms planned acquisition of Compaq.

"Theres no connection with our transaction," said Bar-Shany. "As long as HPs share price is within the range we discussed theres no issue."

It hopes to conclude the HP deal so it can focus on next Aprils Ipex.

Shipments of presses rose 14% with nearly half of those being its Platinum, which was introduced in July. Gross margins fell to reflect the increased volume of lower-margin products and price cuts in the US.

It also installed the first beta versions of its Publisher series web press and is on track to install the first of its Photo-e-Print presses for the photofinishing market by the end of the year.

The UK remained the firms biggest market in Europe and is seen as an example for other countries.

Story by Barney Cox