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Earnings Roundup / Hewlett-packard

Profit drops 13% as sales edge higher

February 19, 2009|Times Wire Reports

Hewlett-Packard Co.'s fiscal first-quarter profit dropped 13%, and sales ticked up just 1%, as even the technology company's cash-cow printer ink business was hobbled by the recession.

The world's top seller of personal computers also cut its fiscal 2009 guidance, but it was still in line with Wall Street's expectations.

HP shares fell $1.08, or 3.2%, to $33 in extended trading, after closing down 26 cents at $34.08 during the regular session before the Palo Alto company reported its earnings.

Crippled technology spending slammed all but one of HP's major business lines, including PCs and servers. Only HP's services division, which bulked up with its $13.9-billion acquisition of Electronic Data Systems, saw an increase.

HP earned $1.85 billion, or 75 cents a share, in the three months ended Jan. 31, compared with $2.13 billion, or 80 cents, a year earlier.

Without one-time costs, HP earned 93 cents a share, matching analyst estimates.

HP's sales of $28.8 billion fell short of Wall Street's forecast by more than $3 billion, however. Analysts were expecting $31.9 billion in revenue. Without currency fluctuations, HP said its quarterly sales increased 4% over last year.

HP predicted that it would earn $3.76 to $3.88 a share in its 2009 fiscal year ending in October, excluding one-time costs. Analysts polled by Thomson Reuters were expecting profit of $3.77 a share on that basis.

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