By Tess Stynes
Hewlett-Packard Co. said its earnings for the January quarter
fell 4.1% as sales of desktop computers fell sharply from a year
ago and the company's revenue growth slowed across its different
segments.
Shares fell 5.2% to $36.50 in recent after-hours trading as
revenue missed expectations.
For the year ending in October, H-P lowered its per-share
earnings estimate by 30 cents a share to reflect the negative
impact from foreign exchange. The company now expects a per-share
profit, excluding certain items, of $3.53 to $3.73.
For current quarter ending in April, the company forecast
per-share earnings excluding certain items of 84 cents to 88 cents,
while analysts polled by Thomson Reuters expected a per-share
profit of 96 cents. H-P said its outlook includes a negative impact
from currency of nine cents a share.
"While we were able to manage the impact of currency in the
quarter and deliver earnings as expected, we believe the impact on
[our full-year earnings] will be significantly greater than we
anticipated in November, " Chief Executive Meg Whitman said. "We'll
work hard to offset these impacts through repricing and
productivity, but fully mitigating currency movements of this size
would require reducing investments and mortgaging our future. We
won't do that."
"With the first quarter of fiscal 2015 now behind us, the H-P
turnaround remains on track," Ms. Whitman said.
Hewlett-Packard in October unveiled plans to separate its
personal-computer and printer businesses from its corporate
hardware and services operations, which has been billed as the
growth engine. The company is expected to provide further details
about the planned separation during its conference call.
The recent wave of breakups and spinoffs at technology companies
and in the wider corporate world has been fueled by the idea that
companies with a narrower focus perform better.
What will be called Hewlett-Packard Enterprise--a collection of
products and services, including hardware, software, and
consulting, marketed to corporate customers--saw revenue decline
6.7% in the latest quarter to $13.66 billion.
The company's personal computers and printers business, which
will form the second company, dubbed HP Inc., reported revenue
dropped 1.8% to $14.09 billion. Sales of desktop units fell 7% in
the quarter.
H-P also has been undergoing a multiyear restructuring in an
effort to stem sales declines. The company has laid off tens of
thousands of employees and cut other costs to support its bottom
line.
For the fiscal first quarter ended Jan. 31, H-P reported a
profit of $1.37 billion, or 73 cents a share, down from $1.43
billion, or 74 cents a share, a year earlier. Excluding
restructuring charges, separation costs, acquisition-related
charges and other items, per-share earnings rose to 92 cents from
90 cents. The company guided for 89 cents to 93 cents a share.
Revenue decreased 5% to $26.84 billion, below analysts'
estimates of $27.34 billion. Excluding currency impacts, sales
declined 2%.
Write to Tess Stynes at tess.stynes@wsj.com
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