Hewlett Packard has announced revenues for its first fiscal quarter ending 31 January of $32.3bn (£19,9bn), up 4% on the same period a year ago.
This means earnings per share were up 26% on 2010 at $1.17, but HP shares fell up to 13% in late trading because first quarter revenue and second quarter forecasts were below analyst estimates.
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Analysts were projecting first quarter profit of $1.29 a share and sales of $33bn on average.
Blaming sluggish demand for services and consumer products, HP said it expected second quarter profit of $1.19 to $1.21 per share and sales of $31.4bn to $31.6bn, falling short of average analyst estimates of profits at $1.26 and revenue of $32.6bn.
For the full year, HP cut its upper sales forecast to $131.5bn, also below analyst estimates of $133.1bn, but expected earnings of $5.20 to $5.28 a share were in line with analyst estimates.
The outlook highlights the fact that new chief executive Leo Apotheker faces the challenges of HP's reliance on home-computer shoppers and consequent vulnerability to a consumer slump and the need for services unit to find ways to better capitalise on a shift to cloud computing, according to Bloomberg.
Sales of PCs to consumers declined 12% in the first quarter, and total personal systems group revenue fell 1% to $10.4bn.
Apotheker, who is to outline his strategy for HP on 14 March, has indicated that he plans to rely more on research and development to reinvigorate growth, which contrast with former CEO Mark Hurd's strategy of cutting costs.
To put HP on a new course, Apotheker and company chairman Ray Lane have shuffled the board, turned to acquisitions to expand in software, and are looking to expand HP's presence in the smartphone and tablet computer markets.
Apotheker said he was pleased with the first quarter profits and operating margin of 10.5%, up from 9.6% a year ago.
"Going forward, we have the opportunity to further capitalize on our customers' demands for higher value-added solutions," he said.
Apotheker said HP has a powerful portfolio, including recently announced cloud and connectivity offerings.
"We are focused on leveraging these strengths to extend our leadership and accelerate growth," he said.
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