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HP revenue drops from a year ago

Hewlett-Packard continued to suffer from a slow down in technology spending in its third fiscal quarter, posting a fall in revenue.

HP generated $16.5bn (£10.8bn) in revenue for the quarter ending 31 July, compared with $18.6bn for the same quarter a year ago, and posted a $2bn (£1.3bn) net loss for the quarter.

HP made its first earnings announcement since completing its acquisition of Compaq Computer in May. The financial results provided by HP reflected the combined company's earnings, counting Compaq's prior fiscal quarter results as if they were combined with HP at the start of its prior fiscal quarters, according to the statement.

HP took a $1.6bn (£1.04bn) charge in the quarter for restructuring, a $735m charge for research and development, a $322m charge for merger-related retention and a $340m charge for other merger-related items.

Sales slowed in all regions for HP compared with the same quarter last year. Revenues dropped 6% in the US, 10% in the Americas, 11% in Europe and 15% in the Asia/Pacific region, said HP chairman and chief executive Carly Fiorina.

The company has reduced its workforce by 4,740 employees and said it remains on track to make 10,000 job cuts by the end of its fiscal year.

The company's lucrative imaging and printing business showed a 10% revenue increase year on year to $4.7bn. This segment includes printers, digital cameras and other similar equipment.

HP's personal systems business, which includes PCs, notebooks, workstations and handheld devices, fell 19% year on year to $4.8bn (£3.1bn). Consumer PC revenue fell 20% compared with last year, and commercial PC revenue tumbled 15%. The company cited intense price competition and lack of demand as a result of the declines in its statement.

HP's enterprise systems business did not fare much better as revenue tumbled 22% year on year. The company generated $3.8bn in revenue from its servers, storage systems and software included in this segment.

HP lost ground to competitors in sales of Unix servers, despite shipments of its high-end Superdome server increasing by 9%. The company plans to bring its hardware businesses back to profitability next year, said Michael Capellas, president of HP.

Its services operations revenue also fell in the quarter, down 7% year on year to $3bn.

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