Shares of Hewlett-Packard, the world's biggest computer company, fell 5.4 percent in mid-morning trading Thursday after the company reported first-quarter earnings that beat expectations but issued a mediocre earnings forecast. HP shares were down $1.59 to $27.35.

The company also forecast second-quarter operating income between 88 cents and 91 cents, with net income ranging between 68 cents and 71 cents, lower than expectations.

Valued at $57.4 billion, the fall lowered the value of the Palo Alto, Calif.-based company by $2 billion. By comparison, the value of No. 2 computer player, IBM, is $228.5 billion. IBM shares rose 23 cents to $194.10 in early trading.

The fall in HP shares follows Wednesday's 5 percent dip for Dell, the No. 3 PC maker, which reported lackluster results on Tuesday. Both PC giants said demand had eased in the last two months of 2011 and in January.

HP reported first net income of 73 cents a share, as revenue dipped 7 percent to $30 billion. Analysts, guided by extremely conservative guidance from Whitman and CFO Cathie Lezjak, had estimated HP would report earnings of 87 cents a share on revenue of $30.07 billion. Indeed, HP reported operating earnings of 92 cents.

A year ago, HP reported net income of $1.17 a share, or $1.36 per share on operations, on revenue of $32.3 billion.

Last night, new CEO Meg Whitman told investors HP had underinvested: in research and development, hadn't planned for the current inflection point in technology where consumers appear to buy fewer PCs and print less, battering HP's printers business, which is the world's largest.

We have to lead again, said Whitman, 56, the defeated Republican candidate for Governor of California in 2010 who wound up as the surprise CEO of HP last September after the firing of Leo Apotheker.

Whitman, who became a billionaire as CEO of eBay, complained too much of HP's work had been done in silos and the company needed to be streamlined. But she didn't lay out a specific recovery plan.

HP reported PC sales fell 15 percent from the year-earlier period, with a 25 percent fall in consumer sales.

As well, the pace of orders by corporations was slow, in part because they await Microsoft's introduction of Windows 8 in the third quarter, which is expected to stimulate replacements. HP, though, has a major presence in the consumer sector.