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The world's largest PC maker, Hewlett-Packard Corp. (NYSE: HPQ), reported a 10% quarterly drop in earnings. In other words, welcome to the recession HP. Although the PC industry has been hammered along with every other industry in the global economic recession, HP has continued to shine, all things considered, in recent quarters. Reality hit this Wednesday after the market, however.CEO Mark Hurd, an expert at containing costs and pressing into new business areas, is the right leader at the worst time in the company's recent history. Still, can any company weather the economic and consumer spending mess in progress? For HP, analysts who were expecting $0.93 per share for the company's first quarter saw a figure of $0.75 once HP let the results hit.
HP still leads the PC manufacturer pack even with the nosedive in consumer and business PC spending that has done nothing but slow down in the last three months. The October to December 2008 sales period was the worst for the PC industry in six years, and HP's exposure to the hardware sector would have one think it was hit particularly hard in the quarter. It was.
As with many prior quarters, the company's printer and ink business may be -- again -- its salvation for the next few quarters. Will HP continue letting that profit-making division subsidize the rest of the company? The good news is that it can afford to -- a luxury its main PC competition can't match.
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