HP reports mixed quarter on weak PC sales

22.02.2011
Hewlett-Packard reported a jump in profit for the first quarter of its 2011 fiscal year but sales were dragged down by weakness in its PC and services divisions.

The poor performance from those groups prompted HP to lower its revenue forecast for the year, causing its share price to slump 12 percent after the results were announced.

"If you use Q1 as a marker, it's clear we do a lot of things well at HP. It's also clear that we have isolated areas that we need to improve," CEO Leo Apotheker told reporters on a conference call.

HP's profit for the quarter ended Jan. 31 was US$1.36 per share before one-time items, up 27 percent from a year earlier and ahead of the $1.29 per share that financial analysts had expected, according to a consensus poll from Thomson Reuters.

Revenue was $32.30 billion, up 4 percent from a year earlier but below the $32.96 billion that analysts had been looking for.

Revenue from HP's services division declined 2 percent from last year to $8.6 billion. It did well with bigger, long-term deals, but short term contracts for IT outsourcing and application services fared poorly, Apotheker said.