Recession catches up with HP – a little
The world’s biggest PC maker sees quarterly profit dip 13% to $US1.85 billion. Buying EDS begins to look like a smart move as earnings from its services division double.
HP reported net income of $US1.85 billion ($US0.75 a share) for its quarter ending January 31, down from $US2.13 billion ($US0.80 a share) in the previous quarter.
The company’s cornerstone divisions recorded a profit downturn, with earnings in its PC business down 31%, and its PC business down 3.2%.
But outside HP’s commodity business, the picture was brighter.
Earnings from the company’s services division – now including EDS – doubled, and software earnings tripled.
Revenue was up 1.2% to $US28.8 billion for the quarter.
HP modestly lowered its guidance for the full year. It now expects earnings of between $US3.76 and $US3.88 a share on a 2% to 5% drop in revenue. It’s previous expectation was $US3.88 to $US4.04 a share on revenue growth between 7.7% to 9.8%.
The company managed to increase its PC market share during quarter, consolidating its number one position ahead of Dell around the world. IDC’s most recent New Zealand figures mirror the trend, with HP dominating across the board.
HP shares were flat in after-hours trading on the post-market annoucemnt.