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Hewlett-Packard issued a profit warning for its first fiscal quarter today.

The US computer firm said worsening economic conditions and slowing demand from consumers and corporates, especially in the US, meant sales and profits for the quarter ending 31 January would miss forecasts.

It cut its earnings per share forecast to 35-40 cents per share, compared to the 42 cents previously expected. Sales are expected rise by a percentage in the low to mid-single digits, while the company "isn't counting on improvement" during the first half of its fiscal year ending 30 April.

Carly Fiorina, HP chairperson, president and CEO, said: "It's clear there's been a significant change in market conditions in recent weeks. Consumer spending in the US has been below even our own conservative estimates and our enterprise customers - responding to the growing economic uncertainty - have become increasingly cautious about IT spending."

Gross margins are expected to stay at the low end of the 27.5 per cent to 28.5 per cent previously forecast, though the California company said it would hold off on updating its full year outlook due to "rapidly changing market conditions and increasing economic uncertainty".

HP was one of the few major IT players that escaped issuing a sales or profit warning in Q4 last year. At the end of November it said US PC sales were worse than expected, but that this would not hit financial targets for the year, adding that it was comfortable with Wall Street estimates at that time of 44 cents per share for the first quarter.

It joins an ever-increasing list of vendors that have warned sales will miss estimates this quarter, including Compaq, Dell, Gateway, Apple, Microsoft, Intel and AMD. ®

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