Headline Feeds
Hewlett-Packard (NYSE: HPQ) Co. (NYSE: HWP) was down 1.25 at 31.125 in early trading Friday after the company lowered expectations for the first quarter ending January 31st.
The Palo Alto, California-based computer maker said "worsening economic conditions" and a slowdown in U.S. corporate and consumer information technology (IT) spending will lead to earnings of 35 to 40 cents per share in the quarter.
"Underlying the financial guidance we provided in early December were core assumptions about the condition of the consumer and enterprise IT marketplaces," said chief executive officer Carly Fiorina. "We anticipated a slowdown in U.S. consumer IT spending and continued strength in enterprise IT spending, all in the context of the prevailing view that the U.S. economy was headed toward a soft landing."
Fiorina added: "It's clear there's been a significant change in market conditions in recent weeks. Consumer spending in the U.S. has been below even our own conservative estimates and our enterprise customers -- responding to the growing economic uncertainty -- have become increasingly cautious about IT spending."
According to Fiorina, Hewlett-Packard is "not counting on improvement" during the first half of its fiscal year. Fiorina predicted that the company's revenue will grow in the low to mid-single digits with gross margin at 27.5 to 28.5 percent.
The company is staying focused on achieving earnings targets "by aggressively pursuing profitable growth opportunities and effectively managing expenses," Fiorina said.
Fiorina also said that despite the current macroeconomic trends, Hewlett-Packard
"remains confident" in its strategy, product portfolio and financial strength.
