HP earnings dip for Q1 of 2003

Hewlett-Packard Co. Tuesday reported revenue of US$17.9 billion for its first quarter of fiscal 2003, down 1 percent from US$18 billion in revenue in the prior quarter. In its announcement today, HP said that IT spending in the U.S. and Japan continues to lag, although Europe and the Asia-Pacific region posted revenue gains.

For the quarter ended Jan. 31, the company announced earnings per share of 24 cents using Generally Accepted Accounting Principles, up 85 percent from the previous quarter. Non-GAAP earnings were 29 cents per share, 2 cents higher than analyst consensus estimates, according to HP.

"HP is making good headway and continues to execute well," Carly Fiorina, HP chairman and CEO said in a statement. "The first quarter was our best overall profit performance since the merger, demonstrating there is significant leverage in our operating model."

The company "made good progress on cost structures, achieved sequential market share gains in each of our businesses and continued to improve gross margins," she said. "Our revenue shortfalls were largely confined to the U.S. market, as weak commercial spending continued."

Fiorina pointed out two bright spots: HP's Personal Systems unit posted a US$33 million profit for the quarter, compared with a US$68 million loss in the previous quarter, and its Enterprise Systems division cut its loss by 36 percent from the previous quarter.

"Today's world is full of uncertainty, and predictions are difficult," she said. "We're staying focused on what we can control -- maximizing our operating model leverage, delivering the best possible products and services, accelerating market share gains, staying on the offense and investing in growth."

The company affirmed analysts' consensus estimates for the second quarter of 27 cents per share, she said.

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