Hewlett-Packard Co. posted a 19% drop in quarterly profit as sales fell sharply in several of its key businesses, but the technology giant said it was seeing a "stabilized market" and suggested that technology spending has hit bottom.
The computer, monitor and printer maker produced earnings of $1.64 billion, or 67 cents a share, for the quarter ended July 31, down from $2.03 billion, or 80 cents a share, a year ago.H-P's quarterly revenue fell 2% to $27.45 billion from $28.03 billion a year earlier, despite several billion dollars in additional revenue from tech-services company Electronic Data Systems, which H-P acquired last year.
Still, the Palo Alto, Calif., company beat the quarterly forecasts it gave Wall Street in May and H-P reaffirmed its financial guidance from earlier this year.
What's driving revenue is a stabilized market in the United States and Asia Pacific.
H-P shares declined 2% in after-hours trading to $43.07 after ending 4 p.m. trading on the New York Stock Exchange at $43.96, up 85 cents.
While H-P's overall results showed some weakness, sales of PCs and used computers have begun to pick up with the back to school push.
The quarter was H-P's second consecutive period of declining revenue, as reduced corporate spending and falling PC prices slammed the entire tech sector.
Since Chief Executive Mark Hurd took over the company in 2005, H-P has slashed costs and steadily increased its profits, growing to be the world's largest tech company by revenue and beating out PC competitors.
But since last year, the recession has hurt the company's growth. In the latest quarter, revenue declined across almost all of H-P's businesses.
The company, which is the world's largest manufacturer of PCs, reported PC revenue of $8.43 billion for the quarter, down 18% from last year, despite 2% growth in shipments. Operating profit in the PC division fell 34% as computer prices plummeted.
Pricing pressures are also weighing on H-P's biggest rival, Dell Inc., which is set to report quarterly results Aug. 27. Wall Street is expecting Dell's revenue to decline more than 20% in the quarter.
Revenue in H-P's servers and storage division, which sells back-office computing equipment to businesses, fell 23% to $3.66 billion.
Meanwhile, H-P's printer unit saw revenue decline 20% to $5.66 billion as customers cut back on ink and printing supplies.
In H-P's software unit, operating profit rose 13%, despite a 22% revenue decline to $847 million.
H-P is cutting 24,600 jobs as part of the EDS deal, and in May announced a separate round of 6,400 job cuts.
