HP Q3 revenue drops from a year ago

Hewlett-Packard Co. continued to suffer from a slow down in technology spending in its third fiscal quarter, as the company Tuesday posted a drop-off in revenue compared to last year. HP generated US$16.5 billion in revenue for the quarter ending July 31, compared to revenue of $18.6 billion in the same quarter a year ago.

These results translate to $0.14 earnings per share, excluding charges, the company said in a statement. Including charges, HP posted a $2 billion net loss for the quarter or a loss of $0.67 earnings per share.

HP, based in Palo Alto, California, made its first earnings announcement since completing its acquisition of Compaq Computer Corp. in May. The financial results provided by HP reflected the combined company's earnings, counting Compaq's prior fiscal quarter results as if they were combined with HP at the start of its prior fiscal quarters, according to the statement.

Analysts polled by Thomson Financial/First Call forecast that HP would post $0.14 earnings per share for the quarter on $16.7 billion in revenueHP took a $1.6 billion charge in the quarter for restructuring, a $735 million charge for research and development, a $322 million charge for merger-related retention and a $340 million charge for other merger-related items, according to the statement.

The company has reduced its workforce by 4,740 employees and said it remains on track to make 10,000 job cuts by the end of its fiscal year.

The company's lucrative imaging and printing business showed a 10 percent revenue increase year-on-year to $4.7 billion. This segment includes printers, digital cameras and other similar equipment.

HP's personal systems business, which includes PCs, notebooks, workstations and handheld devices, fell 19 percent year-on-year to $4.8 billion. Consumer PC revenue fell 20 percent compared to last year and commercial PC revenue tumbled 15 percent. The company cited intense price competition and lack of demand as a result of the declines in its statement.

HP's enterprise systems business did not fare much better as revenue tumbled 22 percent year-on-year. The company generated $3.8 billion in revenue from its servers, storage systems and software included in this segment.

Its services operations revenue also fell in the quarter, down 7 percent year-on-year to $3 billion.

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