Weak PC sales dent HP income
By Jordan Robertson |
August 20, 2009, Thursday
|
Print Edition
Print Edition
HEWLETT-PACKARD Co's 19 percent drop in quarterly profit shows that the company still relies heavily on printer ink and the troubled personal computer market, despite the aggressive transformation it's undertaking to branch out and encroach more on rival IBM Corp's turf.
IBM, which ditched its PC division as part of a major face-lift over the past 15 years, now makes most of its money from software and services. With its US$13.9 billion acquisition last year of technology services company Electronic Data Systems, HP now too is heavily invested in services - they are its biggest revenue and profit generator.
But HP's latest quarterly numbers, reported on Tuesday after the market closed, show the companies are still very different.
HP's profit dropped in large part due to ongoing weakness in sales of PCs and printer ink - two areas IBM isn't in. Still, HP edged past Wall Street's profit and sales forecasts - something CEO Mark Hurd has done most quarters in his four years at HP's helm.
Ink has long been HP's cash cow, but is coming under pressure from generic, cheaper brands. HP's revenue from printing supplies, which includes ink, was down 13 percent in the three months ended July 31.
HP's PC division posted an 18 percent sales decline, despite improvement in consumer spending, strength in China, and a 2 percent increase in unit shipments.
IBM, which ditched its PC division as part of a major face-lift over the past 15 years, now makes most of its money from software and services. With its US$13.9 billion acquisition last year of technology services company Electronic Data Systems, HP now too is heavily invested in services - they are its biggest revenue and profit generator.
But HP's latest quarterly numbers, reported on Tuesday after the market closed, show the companies are still very different.
HP's profit dropped in large part due to ongoing weakness in sales of PCs and printer ink - two areas IBM isn't in. Still, HP edged past Wall Street's profit and sales forecasts - something CEO Mark Hurd has done most quarters in his four years at HP's helm.
Ink has long been HP's cash cow, but is coming under pressure from generic, cheaper brands. HP's revenue from printing supplies, which includes ink, was down 13 percent in the three months ended July 31.
HP's PC division posted an 18 percent sales decline, despite improvement in consumer spending, strength in China, and a 2 percent increase in unit shipments.
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