HP Q3 PROFIT DOWN 19% ,WEAK INK & TONER SALES

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HP Q3 PROFIT DOWN 19% ,WEAK INK & TONER SALES

 user 2009-08-19 at 11:21:48 am Views: 55
  • #22617
    http://tech.yahoo.com/news/ap/20090818/ap_on_hi_te/us_earns_hewlett_packard
    HP 3Q profit drops 19 %, weak ink & toner sales
    H.P. Tries to Keep the Ink Flowing
    SAN
    FRANCISCO -Hewlett-Packard Co.’s profit dropped 19 percent in the
    latest quarter, dragged by ongoing weakness in sales of personal
    computers and printer ink.The Palo Alto, Calif.-based company reported
    Tuesday that consumer spending on PCs is improving, and business in
    China was particularly good. Corporations are still being tightfisted,
    though.Because of the recession, 2009 is shaping up to be the worst
    year in nearly a decade for the PC industry. HP, the world’s No. 1 PC
    maker, has been branching out aggressively into other areas, like
    technology services and computer networking, but the PC business still
    makes up nearly a third of its revenue.

    Sales in HP’s PC
    business eroded 18 percent in the three months ended July 31, even as
    the number of units sold ticked up 2 percent. PC makers have been
    slashing prices.HP reported after the market closed that it earned
    $1.64 billion, or 67 cents per share, in the fiscal third quarter. A
    year earlier the company made $2.03 billion, or 80 cents per
    share.Excluding one-time items, HP earned 91 cents per share, a penny
    better than the average estimate of analysts polled by Thomson Reuters.

    Sales fell 2 percent to $27.45 billion, slightly ahead of analysts’ projections for $27.26 billion.
    Revenue
    from printing supplies was down 13 percent. One of those supplies —
    printer ink — has long been one of HP’s biggest moneymakers, but has
    been facing competition from generic, cheaper brands.

    HP has
    been reluctant to call a bottom in the PC market, as chip maker Intel
    Corp. did in April — one of the first bullish signs about a turnaround
    in that sector. Cathie Lesjak, HP’s chief financial officer, said in an
    interview Tuesday that PC demand appears to have “stabilized.”

    Lesjak
    said the decline in printing supplies revenue was mostly caused by
    currency fluctuations and changes in the way HP manages inventory at
    resellers. She said she expects the supplies business to improve over
    the next couple of quarters.HP shares were down 15 cents to $43.81 in
    extended trading after closing earlier Tuesday up 85 cents, or 2
    percent, at $43.96.