HP chops away sales slump in Q2
Loss of hands helps firm land on feet
Hewlett-Packard's profits fell 17 per cent during the second quarter this year, thanks to slumping sales of PCs, printers, servers, and storage. Sales were essentially down everywhere except in HP's services biz, where the EDS acquisition is inflating figures quite nicely.
The company also announced another round of layoffs.
The world's dominant personal computer vendor ended April with about $1.72bn in net profit, a drop from $2.06bn during the same period last year.
Net sales worldwide were about $27.4bn for the quarter. That's down about 3 per cent compared to Q2 2008, but up 3 per cent in local currency due to a stronger dollar.
HP has been busy lately slashing expenses wherever it can (example: their workers' paychecks across the entire company) amidst the economic meltdown. The cuts seem to have leveled out the revenue decline a bit. Now HP is going in for another whack. The company said today it plans to cut an additional 2 per cent of its workforce over the next 12 months.
Industry watchers always keep a eye on HP's earnings as a bellwether for worldwide tech sales - doubly so in the crap economy. Lifting the kimono for Q2, it's not exactly a pretty sight.
Consumer PC and desktop earnings declined 19 per cent to $8.2bn total. Notebook revenue slid 13 per cent year-over-year, while desktop revenue fell 24 per cent. Unit shipments were flat compared to the same period last year despite having a leading market position in every region.
HP's enterprise storage and servers business reported total revenue of $3.5bn total, down 28 per cent year-over-year. Storage declined 22 per cent, server and business critical systems declined 29 per cent each, and ESS blade revenue was down 12 per cent.
Imaging and printing declined 23 per cent total to $5.9bn. Commercial printing hardware revenue was down 40 per cent and consumer printer hardware declined 31 per cent.
Services revenue was up 99 per cent to $8.5bn. Holy cra...oh wait, HP recently swallowed EDS, who was an equal-sized fish in the services industry pond. HP reports the EDS integration is "tracking ahead of plan."
So things are ugly for HP, but that's to be expected. The company expects third quarter 2009 revenue to be grow somewhere betwenn not at all and roughly 2 per cent. HP's third quarter of yesteryear saw revenues of $28bn. ®