Hewlett - Packard CEO not as optimistic as other tech chiefs
May 20th 2009 8:00AM
Updated Dec 4th 2009 11:32AM
Tech spending "looks the same" in the current quarter, Hurd told the Wall Street Journal in an interview, not higher than the previous quarter.
What does this mean for tech? In the near term shares may head lower as Hewlett-Packard shares are down heading into Wednesday's open. In the long term, recent tech stock gains may stall or begin to fall.
"I'm not ready to call it better," Hurd said on a company conference call with analysts and investors Tuesday. "It's roughly going to be the same the rest of the year."
Because Hurd doesn't see an improving economy ahead, the company is forecasting a drop in annual revenue of 4 to 5 percent. That's the lower end of a forecast range it gave in February. Hewlett-Packard, which has cut jobs and salaries, plans to eliminate an additional 6,400 workers in the next year because of slower sales.
Bill Kreher, an analyst at Edward Jones, told the Journal that "we're not seeing clear signs of a pick up" in the technology sector. He was, though, "pleased with the results in the quarter" that ended in April at Hewlett.
During that quarter, Hewlett-Packard saw profit fall 17 percent on lower sales of personal computers and printer ink.
The world's largest computer maker said sales will be unchanged or decline as much as 2 percent in the current period, from the last quarter. That would mean sales as low as $26.9 billion and profit, excluding some costs, of 88 cents to 90 cents. On average, analysts are expecting revenue of $27.5 billion and profit of 89 cents a share.
The San-Francisco-based company earned $1.72 billion, or 70 cents per share for the quarter ended April 30. Minus one-time charges and restructuring costs, it earned 86 cents per share, matching the average forecast of analysts polled by Thomson Reuters.
Sales fell 3 percent to $27.4 billion, also lining up with analyst estimates. If not for currency fluctuations, HP said sales would have been up 3 percent for the quarter.
Revenue fell 19 percent to $8.2 billion at Hewlett-Packard's PC unit, as personal computer prices fell. At the company's imaging-and-printing division, revenue dropped 23 percent to $5.9 billion.
Meanwhile, Hurd's comments may throw a bucket of cold water on the recent upbeat comments heard from Cisco and Intel following those companies earnings' reports.
Anthony Massucci is a senior writer and columnist for DailyFinance.