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Profits down 89%

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Hewlett-Packard has suffered an 89 per cent drop in Q3 profits - but the good news is that was above its reduced forecasts.

HP enjoyed sales of $10.1 billion for the three months to 31 July. This was down 14 per cent from the $11.8 billion revenues a year ago. Net profit was $111 million, down from $1.05 billion in Q3 fiscal 2000.

HP's consumer business suffered a 21 per cent drop in revenue body blow. Sales to businesses fell 11 per cent. Home PC sales slumped 36 per cent on last years figures, notebook sales rose five per cent.

In spite of the figures CEO Carly Fiorina said she was committed to the PC business and reckoned the company was a world leader in home PCs.

She said she expects sales to increase from Q3 to Q4 as the holiday spending season arrives. But Q4 revenue is expected to remain 14 per cent below the same period last year.

"We are operating in a very tough environment - no question -- and it is reflected in our results this quarter," said Fiorina in a conference call.

Most HP product lines stiffed a bit this quarter but sub $100 printer did well. Consulting revenue rose 9 per cent, and outsourcing revenues climbed by 20 per cent.

The company is going to take a $250 million to $300 million restructuring charge in the current quarter to pay for the 6,000 jobs its cutting. ®

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