Hewlett-Packard: Asia Hurt Profits
PALO ALTO, Calif. (AP) _ Hewlett-Packard Co. said Wednesday that price cutting in the personal computer industry and weak economies in Asia pushed profits in its latest quarter below expecations.
HP said it expects earnings to be about 65 cents per share when it reports results Friday for the three months ending April 30. Analysts had predicted earnings of 77 cents a share.
The nation’s second-largest computer company earned 75 cents a share for the same quarter of last year.
Chairman and chief executive officer Lewis E. Platt said the company enjoyed strong growth in revenues and orders during the quarter.
``We’re pleased that our customers continue to respond enthusiastically to our products,″ he said. ``However, we clearly have more work to do to translate our strong growth into acceptable profitability.″
HP is the latest high-tech company to warn of or report disappointing results. Last month, Compaq Computer Corp., the world’s largest supplier of PCs, reported that flat sales and the need to cut prices virtually wiped out its profit for the January-March quarter.
And Intel Corp., the world’s largest maker of computer chips, said it would cut 3,000 jobs in the wake of sluggish demand that caused its profits to drop 36 percent.
HP, in addition to citing pricing pressures, said Wednesday that economic weakness in Asia hurt several of its business. Most affected was measurement equipment, usually among HP’s most profitable products.
The disappointing outlook came after the stock market closed. Shares of HP finished up $1.75, or 2 percent, at $81.62 1/2 on the New York Stock Exchange.
Tim Bajarin, president of Creative Strategies Research International in San Jose, Calif., said HP’s warning was not surprising, considering the spate of lower-than-expected results.
``The Asian impact we knew was going to be an issue,″ he said. ``We also knew that last quarter from other companies there was a slowdown, so it shouldn’t be a surprise it hit HP as well.″
HP is based in Palo Alto, Calif.