H-P earnings fall as PC, printer sales drop - MarketWatch
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SAN FRANCISCO (MarketWatch) -- Hewlett-Packard Co. reported a drop in earnings for the second fiscal quarter as sales fell across nearly all the company's business lines, most particularly among PCs, servers and printers.
The results were largely in line with Wall Street's estimates. Shares of H-P (HPQ 34.90, -1.68, -4.59%) fell 4.1% in after-hours trading, as the high-tech giant issued a forecast for the current period that was also roughly in line with analysts' targets.
"The results underscore the difficultly in the current environment," said analyst Bill Kreher of Edward Jones. "However, strong companies like H-P are able to offset that with strong cost controls."
H-P reported earnings of $1.7 billion, or 70 cents a share, for the quarter ended April 30 compared with earnings of $2.1 billion, or 80 cents a share, for the same period the previous year. On a non-GAAP basis, the company said it would have earned $2.1 billion, or 86 cents a share, for the recent period. The results include charges of 2 cents a share related to a patent dispute.
Sales fell 3% to $27.4 billion.
Analysts were expecting earnings of 85 cents a share on revenue of $27.5 billion, according to consensus estimates from FactSet Research.
Revenue for the company's personal systems group fell 19% to $8.2 billion. Revenue from desktop computers fell 24% while laptop revenues fell 13%. Operating profit for the group was $374 billion -- down from $544 billion last year.
The printing and imaging business saw revenue fall 23% to $5.9 billion. Printer unit shipments fell 27% while supply revenue fell 14% from the same period last year.
H-P's services business saw revenue jump 99% to $8.5 billion. The company said the increase came from its acquisition last summer of EDS. The company's software business saw revenue fall 15% to $880 million.
For the current third fiscal quarter, H-P said it expects revenue to remain flat to down 2% from the recently ended period. Wall Street has expected revenue to remain flat. Earnings per share -- excluding one-time charges -- are expected to come in between 88 cents to 90 cents. Analysts were expecting earnings of 88 cents a share, according to FactSet estimates.