Europe was the bright spot in Hewlett Packard's second quarter - the last reported quarter without Compaq. But the company saw little recovery in worldwide IT spending in the rest of the year.
Despite reaching earnings estimates for the three months to the end of April, the company remained downbeat about the state of spending in the IT market.
HP is not counting on meaningful improvement in IT spending until 2003, chief executive Carly Fiorina told analysts. "Customers are taking their time to make purchasing decisions," she said.
In the enterprise market, telecom and manufacturing sectors continued to be the weakest. Overall enterprise revenues fell five per cent sequentially.
HP's total second quarter revenues fell seven per cent from the previous quarter to $10.6bn (£7.3bn). That was also down from $11.7bn (£8.1bn) in revenues in the year-ago quarter.
Although HP revenues were lighter than expected, HP managed to meet its own and Wall Street's expected earnings largely because of cost cutting and gross margin improvement in its imaging and printing business.
While the company's revenues in the US fell 11 per cent from the first quarter and 16 per cent from the year-ago quarter, revenues in Europe fell six per cent from the first quarter but were up two per cent year-over-year - the only region of the world to show year-over-year improvement.
Fiorina implied that HP's second quarter was affected by the court battle over the Compaq merger as well by the company's preparations for operations after the deal closed. "People in [the] last month of the quarter were focused in two places at once," she said.
HP has refused to detail plans for the upcoming quarter, deferring questions until an analyst meeting set for 4 June. The company also said it would give details of the planned job cuts outside the US that it started notifying employees about on Monday.
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