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HP's Q2 Home PC Revenue Off 15%

5/28/2001 02:00:00 AM Eastern

PALO ALTO, CALIF. — Claiming an overall tough economic environment and weakness in consumer spending, Hewlett-Packard said home personal computer revenue declined 15 percent in the fiscal second quarter, due mainly to weak demand and associated pricing pressures in North America.

The company said notebook computers enjoyed an 18 percent gain in revenue during the second three months, compared to the year-ago second quarter.

Overall revenues in the company's consumer business dropped 8 percent.

"Despite the disappointing financial results in this business, we've done heavy lifting over the last 20 months," said Carly Fiorina, chairman/CEO. "We're investing in the right areas and making tough decisions. And as a result of these efforts, we have a very powerful value proposition for customers and we're intent on demonstrating it in our results."

Breaking out its revenue, HP's Imaging and Printing Systems segment — which includes laser and inkjet printers, and is the company's largest product area by dollar volume — reported a 3 percent drop in sales to $4.98 billion in the second three months, compared with $5.15 billion in the year-ago second quarter. Earnings from operations in the segment dropped 41 percent in the second quarter to $410 million, compared with $697 million in the year ago three months.

In HP's Computing Systems segment, which includes PCs, and is the second largest dollar-volume producer, revenue in the second quarter declined 7 percent to $4.66 billion, compared with $5 billion in the year-ago three months. Earnings from operations in the segment were a negative $130 million in the second quarter, compared with a positive $183 million in the same three months last year.

For the six months, revenue for the imaging segment dropped 2 percent to $10 billion, compared with $10.2 billion in the previous six months. Earnings from operations for the six months in the imaging segment declined 24 percent to $1.1 billion, compared with $1.4 billion the previous year.

In the computing segment for the six months, revenue declined by 3 percent to $9.6 billion, compared with $9.8 billion in the year-ago period. Earnings from operations dropped to a negative $149 million in the first six months of fiscal 2001, compared with a positive $373 million in the same six months in 2000.