HP's lackluster guidance for the second (current) quarter and full year disappointed analysts.

The company said it expects Q2 earnings per share to be between 84 cents and 86 cents per share, which is below analyst's expectations of 89 cents per share. Further, HP said revenue will likely fall to a range of $27.5 billion to $27.7 billion -- well below expectations of $31 billion.

For the year, HP said it expects earnings of $3.76 to $3.88 per share, with revenue of $112.5 billion to $116 billion. Analysts were expecting fiscal-year earnings of $3.77 per share on revenue of $126.5 billion.

Tighter IT budgets and a weak consumer conspired against HP.

Only its services division saw an increase in the first quarter, and much of that was the result of its $13.9 billion purchase of Electronic Data Systems last year. That division saw revenue grow 116% to $8.7 billion while operating profit grew to 12.8% of revenue, up from 12.3% of revenue a year ago.

There were declines elsewhere, too, including the all-important imaging and printing group, which contributes more than 40% of HP's operating profit. Sales for that group fell 19% to $6 billion as things such as ink cartridges, which are the company's biggest moneymakers, registered a 7% decline.

The personal systems group was also a big loser in the quarter, as sales fell 19% to $8.8 billion. Within that division notebook revenue fell and desktop revenue dropped a whopping 25%. The enterprise storage and servers division was another big loser -- down 18% in the quarter.

While HP is no doubt feeling the pinch from the weakening economy, it still maintained or grew operating profit margins in most of its businesses, evidencing managements focus on cost-cutting.

Louis Navellier's PortfolioGrader Pro, which offers free ratings for nearly 5,000 Wall Street stocks, rates HPQ a B or Buy.

Jamie Dlugosch is a contributor to OptionsZone.com.