Sunday, August 25, 2013

Hewlett-Packard Sales Drop as PC Demand Wanes

SAN FRANCISCO — The long slide in sales of personal computers and tough competition are taking a toll on Hewlett-Packard.

H.P. had third quarter revenue below the expectations of Wall Street analysts.

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On Wednesday, H.P. reported net income in the third fiscal quarter of $1.39 billion, or 71 cents a share. A year ago, H.P. reported a loss of $8.9 billion, based on a write-down of various assets. Excluding those charges, H.P. posted profit of 98 cents a share.

The company said revenue fell 8 percent to $27.2 billion, from $29.7 billion a year ago.

On an adjusted basis, excluding certain costs, the net income was in line with Wall Street expectations. They had expected 86 cents a share and revenue of $27.3 billion, according to a survey of analysts by Thomson Reuters.

“I remain confident that we are making progress in our turnaround,” Meg Whitman, H.P.'s chief executive, said in a statement accompanying the earnings. “We are already seeing significant improvement in our operations.”

H.P., the world’s largest maker of personal computers, printers and computer servers, has struggled for years in the face of weakening consumer demand. Other technology companies, including Oracle and Cisco, have also recently warned of poor demand from emerging markets.

On Wednesday, H.P. also announced that David Donatelli, the head of its unit selling servers, networking equipment and data storage to business, would be assigned to a new role identifying potential acquisitions. He will be succeeded by William Veghte, a Microsoft veteran who was previously in charge of software at H.P. Ms. Whitman also replaced the company’s head of marketing. Earlier, she had replaced the head of the company’s PC business.

“It’s possible she’s saying ‘I have more credibility as a leader now, and I need to shake things up,'?” said Toni Sacconaghi, an analyst with Bernstein Research. “Revenue growth across the company has been very weak.”

This article has been revised to reflect the following correction:

Correction: August 21, 2013

An earlier version of this article misstated how H.P.’s net income comported with Wall Street analysts’ expectations. On an adjusted basis, excluding certain costs, the net income was in line with expectations. It was not below expectations.

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