HP profit falls but beats expectations


June 18, 2010 Updated Aug 18, 2009 at 7:31 PM EDT

US computer giant Hewlett-Packard reported a 19-percent fall in quarterly net profit on Tuesday but its results bettered the expectations of Wall Street analysts.

The Palo Alto, California-based company, the world's largest manufacturer of personal computers, posted a net profit of 1.6 billion dollars in the third quarter compared with 2.0 billion dollars a year ago.

Earnings per share of 91 cents were better than the 88-90 cents per share expected by analysts.

Revenue declined by two percent to 27.5 billion dollars.

HP said revenue grew eight percent in the Americas to 12.6 billion dollars and declined 12 percent in Europe, the Middle East and Africa to 9.9 billion dollars. Revenue in Asia Pacific was down four percent to 5.0 billion dollars.

HP said it expected revenue and earnings for the full fiscal year to be in line with the "mid-point of the outlook range" provided in May, when it said it expected earnings per share of between 3.76 dollars and 3.88 dollars.

"Business is stabilizing, and we are confident that HP will be an early beneficiary of an economic turnaround and will continue to outperform when conditions improve," HP chairman and chief executive Mark Hurd said.

HP said revenue from its services division increased by 93 percent in the quarter to 8.5 billion dollars due primarily to its August 2008 acquisition of Electronic Data Systems Corp. (EDS).

Revenue from enterprise storage and servers was down 23 percent to 3.7 billion dollars while software revenue declined 22 percent to 847 million dollars.

Revenue at HP's Personal Systems Group declined by 18 percent to 8.4 billion dollars. Notebook computer revenue was down 10 percent while desktop computer revenue declined by 26 percent.

Revenue at HP's Imaging and Printing Group declined by 20 percent to 5.7 billion dollars.

HP shares shed 0.34 percent to 43.81 dollars in after-hours electronic trading in New York.

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