World’s largest computer hardware maker, Hewlett-Packard Company (NYSE: HPQ) reported fiscal third-quarter losses as its bottom-line took a hit from heavy impairment charge and restructuring expenses even as PC sales continued to slide, affecting revenues.
The company now expects full-year earnings to come at lower end of its earlier guidance of $4.05 a share to $4.07 a share.
Commenting over the results, Hewlett-Packard’s Chief Executive and President Meg Whitman said, “HP is still in the early stages of a multi-year turnaround, and we’re making decent progress despite the headwinds.”
For the quarter ended July 31, the company reported a loss of $8.86 billion, or $4.49 a share, compared to a profit of $1.93 billion, or 93 cents a share, in the corresponding period of last year.
After excluding impairment charges and restructuring and other onetime expenses, earnings fell to $1 from $1.10 a share. Just a few days before, the company had raised its earnings guidance to about $1 a share.
Revenue for the period contracted 4.9% to $29.67 billion while analysts polled by Thomson Reuters had forecasted revenue of $30.1 billion.
The company said that revenue from services segment fell 3.1%, while revenue from its enterprise, servers, storage and networking segment shrunk 3.8%.
Meanwhile, sales in PC business plunged 10% while unit shipments also slumped 10%. Notebook revenue slipped 13% and revenue from desktop segment contracted 7.7%. Revenue from the imaging and printing unit fell by2.7%.
The company recorded an impairment charge of $9.19 billion for the quarter. Earlier in August, the company revealed that it will be writing down the value of its services segment by nearly $8 billion, emphasizing the fact that how its service segment has struggled. The write down also raises questions over why and how much the company overpaid while acquiring Electronic Data Systems in 2008 for more than $13 billion.
Meanwhile, the company’s core business—the PC market is also grappling under global economic uncertainty and rising price competition and users shift towards iPad and other smartphones.
Just a day before, HP’s rival Dell Inc. (NASDAQ: DELL) reported a sharp fall in its quarterly earnings which fell by 18% while revenue slipped 7.5% owing flagging sales of both desktops and notebook computers.
Recent Comments