HP stock price sinks in face of tough times

HP reported that it made $2.3 billion in profit on $31.6 billion in revenue during the fiscal quarter that ended April 30 in a showing that bested the same period a year earlier by five per cent and three per cent respectively.

"HP executed well and delivered a solid quarter," said HP chief executive Leo Apotheker.

"We are accelerating our efforts to align our services business model to our long-term strategy to deliver unprecedented value to our customers and a better return for our shareholders."

The earnings beat analysts' predictions but the stock price sank more than eight per cent to $36.55 a share after the California company cut its expectations regarding earnings for the full year.

HP said it expected revenue for the fiscal year to be from $129 billion to $130 billion.

The gloomier outlook reflected "near-term impact from the Japan earthquake and related events" along with soft sales of personal computers to a public increasingly enchanted with tablet devices.

HP said it also expected reduced operating profit in the competitive business tech services sector.

The company moved up the release of its latest earnings figures after leaked internal memos revealed that Apotheker was calling on executives to be frugal with HP's money.

The chief executive has reportedly vowed to ferret out the source of the leak, which was not mentioned in an early-morning earnings conference call.

The company saw strong revenues in sales of business computers, software, and printers but consumer demand was lower than its "cautious" expectations, according to Apotheker.

HP has trimmed its earnings forecasts in both fiscal quarters since Apotheker took over as chief executive of the firm.

Apotheker took the HP helm late last year to replace Mark Hurd, who resigned as HP chief in early August after a sexual harassment probe uncovered subterfuge with company expenses.

He previously worked as CEO of Germany's SAP, which he left a year ago after a short tenure.