Hewlett-Packard has had a tough first quarter following a fall in net income and a 7 per cent decline in sales under new Chief Executive, Meg Whitman.
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Although HP is still the largest producers of PCs in the world, they’ve been struggling to compete with the competition from Apple’s Mac computers and have been reactive in adopting new Ultrabooks and tablet technologies. To make matters worse, ninemsn reports the company has been having a hard time trying to capture PC sales in emerging markets.
HP struggled most in the consumer market after enduring a 23 per cent drop compared to the year before it.
In the three month period ending January 31st, the company generated a net income of US$1.47 billion (A$1.38B), a steep decline compared to last year’s results which were US$2.6 billion. The company did surpass analyst FactSet expectations on earnings per share when adjusted for one-time items, at US92 cents per share compared to the forecasted US87 cents.
Revenue also slipped to US$30B down from US$32.3B, which fell shy of the forecasted US$30.7B. These results were worse when fluctuations in exchange rates were omitted, with it falling by 8 per cent; the quickest drop in revenue for the company since the recession in 2009.
HP has been having a tough time ever since the company’s TouchPad tablet experienced poor sales, resulting in then CEO Leo Apotheker to put its Personal Systems Group up for sale. When Whitman replaced him in September, she decided to keep the large-volume but small profit division. Unfortunately by that time some customers would have lost confidence in the company’s ability to provide future support.
HP believes this quarter will yield better results, forecasting an increase in share prices of US88 cents to US91 cents. However upon the release of these financials, its share prices dropped by US38 cents.