Hewlett Packard Co on Wednesday said earnings for its fiscal second quarter will be well short of expectations due in part to pricing pressures in the PC market and economic weakness in Asia.
The worlds second-largest computer supplier said its earnings were now expected to be about 65 cents per share for the quarter ended April 30 vs. 75 cents per share in the same period last year when it reported net earnings of $784 million.
Prior to the latest warning, the consensus among analysts had been for second quarter earnings of 77 cents per share, according to First Call.
While we did achieve good revenue and order growth this quarter, we are disappointed that our early calculations show earnings per share coming in well short of expectations, Hewlett-Packard chief Lewis Platt said.
In a conference call with analysts, Steve Pavolvich, manager of investor relations at HP, said the company was hurt by the flood of cheap PCs coming onto the market and its efforts to keep up with competitors fire sale prices.
After experiencing softness in the first two months of the quarter, he said the company discovered there had been a significant slowdown in the business in April.
Pavlovich also said he did not expect the PC business to be out of the woods by the third quarter.
Other units of the company performed better, he said, with the printer business doing very well in the quarter and its Unix Server business solid.
HP also said economic weakness in Asia affected a number of its businesses - measurement systems, whose products typically have higher gross margins.
