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HP experiences a drop in first-quarter sales

Press Release   •   Feb 22, 2013 12:31 GMT

The world's largest maker of personal computers, Hewlett-Packard, has seen a 6% drop in first-quarter sales as demand for PCs continued to shrink.

The technology company's net income declined 16% and revenue fell 6% in its fiscal first quarter from a year earlier, as fell to $28.4 billion, while net profit fell 16% from the previous year to $1.2 billion.

However, the results weren't as bad as HP had originally forecast and provided a glimmer of hope to investors that the worst might be over. HP managed to avoid announcing any write-downs, big job cuts or strategic reversals as it has in some past quarters.

Like other PC makers, HP has been struggling to adapt to a shift toward smartphones and tablet computers, which are siphoning sales from desktop and laptop machines made by HP and other companies. Adding to the problems were some acquisitions gone awry.

HP isn't predicting when its revenue downturn might end. In a conference call with analysts, CEO Meg Whitman said HP still faces a "long road ahead" before its revenue is growing again.

To help offset the revenue decline, HP is in the process of eliminating 29,000 jobs, or about 8 percent of the workforce when it was announced, in a streamlining scheduled to be completed by October 2014.

Whitman said about 15,300 of the jobs targeted in the cost-cutting program have been jettisoned so far. About 3,500 people left in the most recent quarter.

Earlier this week, rival PC maker Dell reported an 11% drop in revenue and a 31% fall in quarterly profit.

Both companies have struggled to grow sales as they battle the surge in popularity of smartphones and tablet computers.

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