HP profit in quarter declines 17%

SAN FRANCISCO - Hewlett-Packard Co.'s quarterly profit dropped 17 percent on lighter sales of personal computers and printer ink, and a sign the woes in consumer technology spending dragged on beyond the miserable holiday season.

HP's results muddy the picture of whether technology spending has fallen as far as it's going to in this recession.

Chief financial officer Cathie Lesjak said that it's still "too tough to call" whether PC sales have hit a bottom. That differs from what one of HP's major suppliers, Intel Corp., said last month. Intel's chief executive, Paul Otellini, said PC sales had "bottomed out" during the first three months of the year and appeared to be returning to normal patterns. HP is the world's number one seller of PCs, while Intel is the world's biggest supplier of microprocessors.

Palo Alto, Calif.-based HP said it earned $1.72 billion, or 70 cents per share. Excluding restructuring and other one-time charges, HP earned 86 cents per share. Analysts were expecting a profit of 86 cents per share, but HP said it beat Wall Street's forecast because it included 2 cents per share of charges related to a patent dispute analysts didn't factor into their estimates.

Sales fell 3 percent to $27.4 billion, which matched analyst estimates. HP says sales would have been up 3 percent were it not for currency fluctuations.

HP kept its profit forecast at $3.76 to $3.88 per share for fiscal 2009, stripping out one-time charges. But it also expects a sharper sales decline. (AP)

The volatile housing market continued to drag down revenue and hurt business in states with the highest foreclosure rates, Home Depot said - taking a less optimistic view than its chief rival, whose own results Monday helped lead a market rally.

"Getting to 'less bad' is not the same as getting to recovery," chairman and chief executive Frank Blake said.

Investors saw Lowe's as the winner of the quarterly duel, thanks to its higher sales at established stores and better gross margins - meaning it made more profit off the goods its sold as it cut costs.

Home Depot's sales at stores open at least a year, known as same-store sales, fell 10.2 percent, with US same-store sales down 8.6 percent. Same-store sales are a key indicator of retailer performance. Lowe's comparable sales fared better, falling 6.6 percent in the United States.

Atlanta-based Home Depot said profit climbed 44 percent - but most of that increase came because it recorded fewer one-time items than it did during the same period last year.

Home Depot earned $514 million, or 30 cents per share, for the three months ended May 3, up from $356 million, or 21 cents per share, a year ago. Adjusted profit, which excludes results from the now-closed Expo business, was 35 cents per share. Home Depot said in January it planned to shutter its 34 Expo Design Centers.

Analysts polled by Thomson Reuters, who generally exclude one-time items, expected a profit of 29 cents per share. Sales for the quarter fell 10 percent to $16.18 billion.

Home Depot maintained its full-year forecast for a 7 percent drop in earnings from continuing operations and a 9 percent drop in sales. (AP)

Still, the company said the results were better than planned, while the quarter's costs were lower than expected.

For the three months ended May 2, Analog earned $51.8 million, or 18 cents per share, down 61 percent from $133.1 million, or 45 cents per share, in the same period a year earlier.

The latest quarter's results were weighed by a restructuring charge of 3 cents per share. Stripping out one-time items, Analog earned 21 cents per share.

Revenue fell 27 percent to $474.7 million from $649.3 million.

Analysts, on average, were expecting a profit of 9 cents per share on sales of $427.2 million, according to a poll by Thomson Reuters. Analyst estimates typically exclude one-time items.

The results "were better than planned as we benefited from increased sales to communications infrastructure and consumer customers and a general abatement of inventory reductions by our customers," said Jerald G. Fishman, the president and chief executive. He added that the quarter's expenses were "significantly lower" than originally planned.

The company's order levels, he added, were stable during the second quarter and have stayed so through the first two weeks of May.

For the third quarter, Analog expects revenue to be about flat on a sequential basis, and it is forecasting earnings from continuing operations between 17 cents and 19 cents per share. (AP)