Just as it’s trying to launch a major new platform for tablets and mobile devices, Hewlett-Packard reported lower-than-expected revenue growth for its first fiscal quarter. The news sent shares tumbling 12 percent on Tuesday.
Disappointing revenue growth raises questions about HP’s momentum as it works to become a bigger player in the new mobile markets. As the largest technology company on the planet in terms of revenue, HP’s perceived position is also a reflection on technology stocks and companies in general.
Ups and Downs
In specific numbers, the company said its net income actually increased 16 percent to $2.61 billion, or $1.17 per share, for the three months ending Jan. 31. This compares to $2.25 billion, or 93 cents per share, a year ago.
Removing one-time items, HP put its earnings for the quarter at $1.36, ahead of what some analysts expected. But analysts had expected revenue growth to about $32.96 billion, so the reported $32.30 billion — even though it was four percent higher than a year ago — was a disappointment.
Over the entire year, HP is projecting net income in a range that matches analysts’ expectations.
HP has been spending heavily on acquisitions, especially to support its technical services to companies — an area that helped save IBM. But its services division had a drop of two percent from the same period a year ago while IBM’s services business, which is much larger, rose by the same amount.
HP’s sales of consumer PCs fell 12 percent, while enterprise servers, storage equipment, and networking products rose 22 percent, commercial PC sales rose 11 percent, and printer products rose 13 percent.
‘Powerful Portfolio’
CEO Leo Apotheker remained optimistic. “Going forward,” he said, “we have the opportunity to further capitalize on our customers’ demands for higher value-added solutions.” He noted that HP has a “powerful portfolio,” which…