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Hewlett-Packard on Tuesday gave its final pre-merger earnings report, saying net income was up by over USD200 million.
The California-based company, which recently completed its acquisition of Compaq Computer, said that earnings excluding acquisition-related and other one-time charges, came to USD498 million, or USD0.25 per share, up from USD336 million, or USD0.17 per share, a year ago. These figures were in line with analysts' expectations for the firm, although revenue failed to hit Thomson Financial/First Call's estimates of USD11.1 billion.
HP reported revenues of USD10.6 billion for its fiscal second quarter, down 9.6 percent from USD11.7 billion this time last year, and down from USD11.4 billion in its fiscal first quarter.
For the three months ended 30 April, HP posted net income of USD252 million, or USD0.13 a share, compared with USD47 million, or USD0.02 a share, in the same period last year. The year-earlier net income was adversely affected by a USD400 million litigation settlement.
"IT spending continues to be quite depressed and pricing pressure is considerable," Carly Fiorina, chairman and chief executive of HP. "IT budgets have not been increased and will not be increased unless there are signs of an economic upturn. Many companies are not spending their IT budgets."
Fiorina said that the fall in revenues was in line with expectations of a 4.9 percent drop in sales caused by merger-related disruption. She said the revenue losses were contained within that model and that the fall in revenues was due to market conditions.
She also said that any recovery would likely be "muted" in the second half and she was not expecting a meaningful improvement until next year.
HP has also started to issue layoff notices and voluntary retirement programs to 15,000 of its staff, as part of the company's effort to cut cost in the wake of the Compaq merger. Details of the arising charges would be announced at an analysts meeting on 05 June. Currently the merged company employs 155,000 people worldwide.
"It's interesting that the commentary on the results notes a softening in consumer demand towards the end of the quarter," Barry Dixon, technology analyst a Davy Stockbrokers in Dublin. "HP had some of their strongest results in their printer division, which is good news for from the Irish perspective."
Hewlett-Packard and Compaq each employ 2,000 people in Ireland in manufacturing, sales, finance, software development and technical support centres. Ireland is not expected to be deeply affected by the layoffs, since there is relatively little overlap between the two companies operations in Ireland.
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