HP's earnings fall for seventh straight quarter

PUBLISHED : Friday, 24 May, 2013, 12:00am
UPDATED : Friday, 24 May, 2013, 3:47am

Hewlett-Packard's slump is deepening as the world's largest personal computer maker scrambles to meet the growing demand for more versatile and less expensive mobile devices.

The latest evidence of Hewlett-Packard's continuing fall came in a quarterly earnings report released on Wednesday. The results included the seventh consecutive decline in HP's quarterly revenue compared with the same period the previous year. HP's 10 per cent decrease in revenue during the three months ending in April was the largest drop so far during the slump.

Most of the erosion has occurred under the leadership of Meg Whitman, the former chief executive at eBay, who was hired to run HP in September 2011.

Whitman has repeatedly warned that HP's revenue might not start growing at an acceptable rate for another year or two as she cuts costs, overhauls the company's product line and pushes into more profitable niches in business software, data analysis and storage and technology consulting. In a statement on Wednesday she reiterated that the company remains in a "multi-year journey."

"I am encouraged by our performance in the second quarter, and I feel good about the rest of the year," Whitman said.

In a sign of optimism, HP predicted that its earnings for the current quarter ending in July will be a slightly better than analysts have been anticipating. Excluding certain items, the company forecast earnings ranging from 84 US cents to 87 US cents per share.

Investors seemed to interpret the guidance as a sign that the cost-cutting measures imposed by Whitman are starting to pay off, even as the company's sales droop.

HP earned US$1.1 billion, or 55 US cents per share, during its most recently completed quarter. That was down 32 per cent from US$1.6 billion, or 80 US cents per share, last year.

The company said that if it had not been for certain items unrelated to its business, it would have earned 87 US cents per share in its financial second quarter.

HP's revenue totalled US$27.6 billion, about US$400 million below analysts' projections.

The troubles plaguing the company primarily stem from a lack of innovation and misguided acquisitions at a pivotal juncture in technology.