HP Strikes China Deal, Sales Slump
SAN JOSE, Calif. – Hewlett-Packard reported declining revenues and profits amid a slumping PC market in which it is gaining some share. The news came the same day it announced a deal to roll its server and networking business in China into a joint venture aiming to take on China’s Lenovo.
Servers were one of the few bright spots in HP’s dismal second fiscal quarter. Overall revenues were down seven percent from the same quarter last year to $25.45 billion, and profits slid to $1.01 billion from $1.27 billion a year ago.
“The PC market is weaker than I expected at the beginning of the year,” said Meg Whitman, HP’s chief executive in a call with analysts.
The company’s PC revenues were down five percent year-over-year, and carved out a razor thin 3.0% operating margin despite a two percent rise in unit sales. The market continues to swing toward notebooks which were up 19% in units as desktops fell 14%.