Hewlett-Packard trims earnings outlook on Japan disaster, weak PC sales and tech services slowdown
Hewlett-Packard trimmed its full-year earnings outlook on Tuesday, pointing to the March earthquake and tsunami in Japan, weak PC sales and a declining tech services business as the reasons for the gloomy forecast.
HP offered its new, lower estimates in a profit report that was issued a day earlier than originally planned -- possibly in response to Bloomberg News' reporting on a leaked memo from HP Chief Executive Leo Apotheker that warned of coming cost-cutting measures and "another tough quarter" ahead.
The Palo Alto-based company, the world's largest PC maker, reported net earnings of $2.3 billion for the quarter ending April 30, up from $2.2 billion during the same period last year but down from $2.6 billion the previous quarter.
Revenue for the period ended April 30 was $31.6 billion, up 3% from a year earlier, but down from $32.3 billion in the quarter ended Jan. 31.
Along with that, HP said it expects "full-year fiscal 2011 revenue in the range of $129 billion to $130 billion" from a previous estimate of $130 billion to $131.5 billion.
HP's revised projection "reflects an expected near-term impact from the Japan earthquake and related events, continued softness in sales of consumer PCs, and reduced operating profit expectations for Services," the company said in its earnings report.
-- Nathan Olivarez-Giles
Photo: A Hewlett-Packard personal computer. Credit: Yat Fai Ooi via Flickr