HP suffers as PC sales slump

 

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By Stuart Turton

Posted on 20 May 2009 at 10:44

HP's profits have dropped by 17% in its second quarter, as demand for PCs and peripherals continues to plummet.

The PC maker was staring at a profit of $1.72 billion at the end of April, down from $2.6 billion during the same period last year.

Global sales hovered at $27.4 billion, a 3% drop on last year. HP was hit in almost every area, with desktop sales down 19% to $8.2 billion and laptop sales down 13%.

The figures would have been worse if it wasn't for the acquisition of Electronic Data Services in August 2008. The company bolstered services revenue by 99%, bringing in $8.5 billion for the quarter.

In response to falling sales, HP has announced a fresh round of layoffs affecting 2% of its global workforce, or nearly 6,420 workers over the next year. HP employs 321,000 worldwide.

The company was also pessimistic when forecasting revenue for the year, saying it would be down by 4% to 5%. Last quarter, HP announced a drop of between 2% and 5%.

"Customers are telling us, 'We're just delaying as long as we can until we have to buy,'" says CEO Mark Hurd during a conference call.

"CIOs have been told, 'Take that infrastructure, keep the infrastructure running and be very particular about new projects you start. If you can avoid starting that project, avoid starting it.'"