Hewlett-Packard Co. reported a 44% decline in first-quarter profit and its revenue missed expectations, underscoring the tech giant's ongoing challenges as it works to get back on track under Chief Executive Meg Whitman.
For its fiscal first quarter ended Jan. 31, the Palo Alto company reported revenue of $30 billion, down 7% from $32.3 billion in the same quarter last year. Analysts had been expecting revenue of $30.7 billion.
Profit was $1.5 billion, or 73 cents a share, down from $2.6 billion, or $1.17, a year earlier. Adjusted for one-time items, the company earned 92 cents a share, above the 87 cents expected by analysts surveyed by Bloomberg.
"The issues are still very much there, and I don't see anything in this earnings result that makes me change my mind," said Richard J. Kugele, a tech analyst at Needham & Co. He noted the company had lost "a lot of balance sheet flexibility" and was losing ground to competitors such as Apple Inc.
Shares of HP fell 41 cents, or 1.4%, to $28.94 on Wednesday. The company released its earnings after the markets closed; in after-hours trading, shares fell more than 1%.
HP said revenue declined 15% year over year in its personal systems group, which makes PCs. In its imaging and printing group, revenue fell 7%. One bright spot was software revenue, which grew 30%.
The company estimated that more than half of its first-quarter revenue decline was because of hard drive shortages caused by flooding in Thailand last year, which hampered shipment volume.
Under Whitman, the former California gubernatorial candidate who took over the top job in September, HP has been trying to reposition itself as a technology stalwart. The company quickly reversed course on some of the changes former CEO Leo Apotheker introduced, most notably his much-criticized plan to spin off HP's PC operations.
In a call with analysts Wednesday, Whitman acknowledged that HP and its employees "have a long road ahead of us."
"Given some of the challenges of the last year, we've been working hard to set the right tone, calm the waters and reassure our stakeholders that HP is the same reliable company," she said.
Analysts said the turnaround process could take several years and noted the company's sluggish outlook for the current quarter. HP said it expected earnings per share of 88 cents to 91 cents, below Wall Street's estimate of 95 cents.