HP faces tough second quarter

Hewlett Packard (HP) has warned of a bleak three months ahead as the company reported first-quarter earnings that were in line with lowered expectations.

Chief executive Carly Fiorina said poor sales in the consumer sector impacted on its PC and Unix servers businesses, and maintained that the company's outlook for growth in its second quarter is in the low to middle single digits.

"Visibility remains extremely limited and we are not counting on a return to double-digit revenue growth this year," she said, adding that the deteriorating economy in the US could spread to other regions.

For the three months ended 31 January, revenue edged up two per cent to $11.9bn, compared to $11.67bn a year ago. Pro forma net profit, before one-time charges totalling $537m, fell 12 per cent to $727m, or 37 cents a share, which was in line with Wall Street expectations.

The charges included a $102m penalty associated with the elimination of 1700 marketing jobs, plus an unspecified amount for pulling out of its proposed acquisition of PricewaterhouseCoopers late last year.

Despite seeing revenue in the US falling by six per cent year over year, Fiorina pointed to HP's printing and imaging businesses as its shining stars, increasing sales by a total of 37 per cent.

Elsewhere in the world, Europe accounted for the slowest revenue growth at seven per cent, although that rate changes to 20 per cent when currency effects are taken into consideration. The busiest region was Latin America, which enjoyed a 14 per cent jump in sales.