Hewlett-Packard Co. on Tuesday reported quarterly sales and profits below analysts’ forecasts from steep discounting of personal computers which faced bruising competition from rival Dell Inc.
The results sent HP shares down 8 percent in after- hours trading as analysts said the company needs to cut costs in order to compete more effectively with No. 1 PC maker Dell, which has grabbed market share by keeping its expenses low and reducing prices.
“It looks like PCs fell back into the red, which is somewhat of a concern given that Dell executed pretty well on the PC side and had a pretty good quarter,” said Marty Shagrin, an analyst at Victory Capital, which owns HP shares.
Computer servers also lost money during the quarter, while HP’s printer business pulled in a steady stream of profits. Even so, the printer business had an operating margin of 14.1 percent, the lowest for the unit since the fiscal fourth quarter of 2001, said Lehman Brothers analyst Dan Niles.
Hewlett-Packard yesterday launched more than 100 new consumer products in its push to be seen as the Apple Computer of the PC market. HP adopted a new design philosophy to develop a broad portfolio of products that are designed to work better together and are easier for consumers to use.
The new design push is being led by the company’s PC division and its imaging and printing unit, which makes printers, scanners and digital cameras. face=Arial color=#0000ff Read More