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PALO ALTO, CALIF. -With difficult U.S. market conditions impacting its consumer and commercial desktop PC business, as well as its printer hardware business, Hewlett-Packard said net earnings were off 59 percent for the fiscal first quarter, while revenue climbed only 2 percent. Revenue in North America dropped 6 percent, said HP.
This shortfall follows Hewlett-Packard's conservative growth assumption, offered a month ago, that overall company revenue in the fiscal first quarter ending Jan. 31 would be in the low- to mid-single digits. Last December, the company said growth figures for the first fiscal half ending April 30 would be 15-17 percent, but then in January, HP said it was no longer counting on these figures.
"Clearly, this was a tough quarter, and our results reflect that," said chairman/CEO Carly Fiorina. "Given ongoing economic uncertainty in the United States, and the potential that this uncertainty may spread to other regions, especially those dependent on exports to the United States, we are maintaining our revenue guidance for the second fiscal quarter in the low to mid-single digits.
"We could see revenue growth improvement in the second half if the U.S. economy improves as some economists expect and current foreign exchange rates hold. However, we are not counting on a return to double-digit revenue growth this year."
HP reported first-quarter revenue of $11.9 billion, just 2 percent above the $11.7 billion recorded in the year-ago quarter, and 7 percent before the effects of foreign currency. Net earnings for the first quarter were $328 million, 59 percent off the $794 million reported in first-quarter fiscal 2000. Excluding all extraordinary items, HP earned $727 million, down 12 percent from the $825 million reported a year ago.
"On a positive note," said Fiorina, "we effectively managed expense growth to just 4 percent for the quarter. Our channel inventories are in good condition. Our balance sheet remains strong. Our printing and imaging business remains very strong despite U.S. hardware declines."
HP's Computing Systems segment, which includes PCs and servers, had net revenue of $4.9 billion for the quarter, 2 percent above the $4.8 billion in the year-ago quarter. The segment reported a loss of $19 million for the first quarter, compared with a $190 million gain in the year-ago first quarter.
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