HP cuts full year outlook on Japan woes

Hewlett-Packard Co slashed its full-year outlook, casting doubts about Chief Executive Leo Apotheker's turnaround plan and sending its shares down 5.4 percent.

The world's largest technology company blamed the impact of the March earthquake in Japan and weak PC sales.

The company released its results a day before it originally planned after an internal memo from Chief Executive Leo Apotheker warned his executives of "another tough quarter" ahead.

Apotheker, who took the helm in September, wants to boost earnings and dividends by pushing into sectors such as cloud computing, where services are hosted from data centers. Investors are looking for signs of progress on that strategy.

"HP has been known historically for consistency," said Gleacher & Co analyst Brian Marshall. "Now they are known for inconsistency."

HP cut its outlook for full-year profit, excluding items, to "at least $5.00 per share" from previous outlook of "$5.20 to $5.28" and cut full year revenue outlook from $130 billion to $131.5 billion to new forecast of $129 to $130 billion.

It expects lower operating profit for its services business, one of its biggest units.

Revenue in the fiscal second quarter ended April 30 rose to $31.63 billion, up 3 percent from the previous year and slightly above the average analyst estimate of $31.52 billion, according to Thomson Reuters I/B/E/S.

The revenue growth was driven by its commercial and enterprise businesses on continued technology spending.

The company reported net income of $2.3 billion, or $1.05 a share, up from $2.2 billion, or 91 cents a share, a year earlier.

Excluding items, HP earned $1.24 a share, better than the average analyst estimate of $1.21 a share.

Its shares were down 5.4 percent at $37.64 in premarket trading.

By Reuters

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