Hewlett-Packard reported Wednesday that net income fell sharply for the first fiscal quarter and warned of continued weakness as it was losing market share in the personal computers and printer business.
HP’s net income fell 44 percent in the first fiscal quarter to $1.5 billion, or 73 cents a share, from $3 billion, or $1.17 a share, a year ago. Revenue fell 7 percent, to $30 billion, from $32.3 billion a year earlier.
At the same time Meg Whitman, the company’s chief, said that she was confident that she can turn the company around. Speaking to analysts and investors after HP released its financial results, Whitman, former head of eBay, who succeeded Léo Apotheker as HP’s chief executive in September, offered an assessment of HP's challenges at the end of her first full quarter on the job.
Its giant Personal Systems Group, where revenue decreased by 15 percent, needs to build more innovative PCs, Whitman said.
First-quarter sales of home computers fell 25 percent and business-PC revenue was down 7 percent. HP has lost share in some of its most important markets, she admitted, including PCs and even in its valuable printer business.
Whitman said she is attacking inefficient product-design and sales processes and investing in research and development to try to make the company more competitive. She blamed last quarter's performance on the economy and on an industry-wide shortage of disk drives. But she also admitted there are deeper problems at HP, which need to be fixed.
PC shipments in the U.S. declined last year for the first time in a decade, and the industry is struggling with a shortage of hard drives after floods affected factories in Thailand last year. Meanwhile, Apple Inc.’s iPad is cutting into PC sales and Lenovo Group Inc. is gaining market share.