HP's fiscal first quarter not so hot

CEO Meg Whitman says that the company is "taking the necessary steps to improve execution."

Hewlett-Packard reported better-than-expected fiscal first-quarter earnings, but sales fell short of expectations. HP, however, cut its outlook for the second quarter as the company’s personal systems group was whacked.

The company reported first-quarter earnings of $1.5 billion, or 73 cents a share, on revenue of $30 billion, down 7 percent from a year ago. Non-GAAP earnings were 92 cents a share. Wall Street was expecting HP to report first-quarter earnings of 87 cents a share on revenue of $30.67 billion.

In a statement, HP CEO Meg Whitman said that the company is “taking the necessary steps to improve execution.”

Indeed, HP’s second-quarter outlook was weaker than expected. HP said that second-quarter non-GAAP earnings will be 88 cents a share to 91 cents a share. Wall Street was looking for earnings of 95 cents a share. HP said GAAP earnings will be 68 cents a share to 71 cents a share.

HP said that it still thinks it can hit its fiscal 2012 target of non-GAAP earnings of $4 a share.

According to HP, the company saw first-quarter revenue slide in multiple regions. In the Americas, first-quarter revenue fell 9 percent to $13.2 billion. Europe, Middle East and Africa sales fell 4 percent from a year ago to $11.7 billion. Asia Pacific revenue in the first quarter fell 10 percent to $5.2 billion. International revenue represented 66 percent of HP’s total revenue.

By unit, HP took hits across the board. HP’s enterprise server and networking, printing and personal systems group took hits.

  • PC unit shipments fell 18 percent in the fiscal first quarter. Consumer PC sales fell 25 percent and commercial revenue fell 7 percent.
  • Printing revenue fell 7 percent in the first quarter from a year ago. Consumer revenue fell 15 percent and commercial revenue fell 10 percent.
  • Enterprise servers, storage and networking revenue fell 10 percent.
  • Services revenue was up 1 percent.
  • Software revenue was up 30 percent in the first quarter from a year ago.

This story originally appeared at ZDNet's Between the Lines under the headline "HP's Q1 sales, outlook light; PC unit takes hit."

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