TECHNOLOGY GIANT Hewlett-Packard has forecast first-quarter profit below analysts estimates, a sign that chief executive Meg Whitman may struggle with the slump that led to the ousting of her predecessor, Leo Apotheker.
Profit for the quarter ending in January will be 83 to 86 US cents a share, excluding some items, the company said in a statement last night. The average estimate of analysts was for $1.11 a share. Hewlett-Packard is suffering as some consumers shun personal computers and businesses curtail spending. Mr Apotheker was replaced by Ms Whitman on September 22nd after slashing forecasts three times in less than a year and jarring investors with a decision to explore spinning off the PC unit.
People are looking for signs of stabilisation even in their largest businesses, and some plans to return these businesses to growth, said Chris Whitmore, an analyst at Deutsche Bank in San Francisco who has a “sell” rating on the shares. The companys August announcement that it would buy software maker Autonomy for $10.3 billion is adding to Hewlett-Packards debt, Mr Whitmore said.
Ms Whitman is working to integrate Autonomy and last month said she would keep the PC business in house. Now, she is resetting Wall Streets expectations for next year. Profit excluding certain items for fiscal 2012, which began November 1st, will be at least $4 a share, missing the average forecast for profit of $4.58.
Hewlett-Packard fell $1.13, or 4 per cent, to $26.86 at the close in New York. The shares have lost 36 per cent this year.
Profit excluding some items for the fiscal fourth quarter, which ended October 31st, was $1.17 a share, and sales fell to $32.1 billion. Analysts had expected $1.13 in profit on sales of $32.1 billion. – (Bloomberg)
