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.