With revenue down across almost all of its businesses, Hewlett-Packard posted a 19 percent drop in profit for the third quarter of 2009.
For the quarter ended July 31, HP recorded earnings of $1.6 billion, down from $2 billion the same quarter a year ago, and earnings per share of 67 cents. A year ago the company earned 80 cents per share. Excluding $568 million in one-time items related to restructuring and acquisitions, HP earned $2.2 billion or 91 cents per share.
Analysts had been expecting earnings between 82 cents and 92 cents per share, and revenue between $26.8 billion and $27.7 billion.
HP's sales for the quarter were in line with expectation at $27.5 billion, but still saw a 2 percent decline in the last year. Revenue dipped, however, in its computer, storage, financial services, software, and printing businesses. The one bright spot was its services division, whose 93 percent increase in revenue to $8.5 billion is due mostly to the company's acquisition of EDS last year. But in total, it was the third straight quarter of falling profit for HP.
Despite that, executives did not sound worried. "I'm pleased with our execution in a tough market climate," Chairman and CEO Mark Hurd said on a conference call with analysts and media Tuesday afternoon.
Hurd said HP saw better-than-expected growth in its sales in China, but the same was not true for the other major regions. "The U.S. remained stable for the second quarter in a row, but we have yet to see the same trend in Europe," he said.
Sales in the Americas were up 8 percent, while they were down 12 percent in Europe.
As the largest supplier of PCs in the world, HP is considered a bellwether for the technology industry. Analysts peppered Hurd with questions about when he sees sales to large enterprises picking up again, which would indicate a healthier overall economy. But he didn't provide the most calming outlook.
"I think what we've seen so far this year is what we'll see for the rest of the year," he said. "I'm encouraged by the stability we see in the market, but we're not ready to call it a turn."
For the next quarter, HP anticipates earnings per share of 97 cents, compared to the 84 cents per share during the same quarter a year ago. But CFO Cathy Lesjak was careful not to create any heightened expectations, saying that revenue growth would be "slightly below historical expectations." Again, Europe was fingered as the reason for the uncertainty. Lesjak said that normally there's a significant increase in sales to Europe during the fourth quarter, but that she doesn't anticipate that this year, saying any increase would be "muted."
HP's shares were down 2 percent to $43.09 in after-hours trading.
This post was updated at 3:30 p.m. PDT with information from the earnings call.