US computer giant Hewlett-Packard saw its share price tumble in the US last night after it cut its forecasts for the rest of the year. This triggered fears that the economic downturn would continue to affect the firm.
HP said its net profit climbed to $2.6 billion in the first three months to January 31 as businesses upgraded IT systems, but it also said computer sales to consumers lagged behind.
Contracts for services, such as hosting and maintaining business computer networks online in the internet 'cloud', also yielded less revenue than the company had hoped, though HP predicted its commitment to the sector would pay off handsomely.
Its net revenue climbed to $32.3 billion in the first quarter, compared to $31.2 billion in the same period a year earlier. Revenue was up 4% compared with a year earlier, while net profit rose 16% with the help of 'financial discipline' according to chief financial officer Cathie Lesjak. The earnings figures fell short of Wall Street forecasts.
HP estimated that its revenue in the current quarter would range from $31.4 billion to $31.6 billion and that net earnings per share would be from 99 cents to $1.01.
HP predicted that its fortunes would improve in the second half of the year as revenues begin kicking in from cloud services and a TouchPad tablet computer and two smartphones powered by Palm's webOS software.
