HP misses quarterly earnings targets

Hewlett-Packard reported growth in earnings and revenue for its third quarter, but still missed analyst forecasts, prompting...

Hewlett-Packard reported growth in earnings and revenue for its third quarter, but still missed analyst forecasts, prompting chairman and chief executive officer Carly Fiorina to acknowledge that the company "should have done better".

Revenue for the three months ending 31 July totalled $17.35bn, up 5% from the same quarter last year but lower than the $17.5bn that analysts had been expecting.

"Nevertheless, we are confident in our strategy and the actions we're taking. We expect to deliver a strong fourth quarter with every one of our businesses profitable," Fiorina said.

In its enterprise systems group, HP's mid-range and low-end Unix server businesses performed poorly, as did its overall enterprise group in Europe and Japan. Sales of its Superdome systems were brighter, with revenue up 64% on the previous year, HP said.

Overall revenue from the enterprise group was $3.71bn, roughly flat from a year earlier, while operating losses came in at $70m, wider than its loss of $7m in the previous quarter but better than its loss of $322m reported for the same quarter last year.

In its personal systems group, slow desktop sales in the US and HP's own "overly aggressive" price discounts pushed results into the red, although the division will return to profit by the end of the year, HP said. Notebook sales were strong, up 27% year on year, and that part of the business remained profitable, HP said.

The personal systems group's total revenue climbed 5% to $4.97bn, while its operating loss was $56m, smaller than the $140m loss it reported a year ago.

HP's services division performed well, with revenue from managed services up 21% from a year earlier and revenue from customer support growing 8%, helping the group return to double-digit profitability during the quarter.

Revenue from the imaging and printing group grew 10% year on year to $5.24bn, and profit returned to "more normal levels," HP said.

James Niccolai writes for IDG News Service

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