HP offers 2010 profit, sales forecast in line with estimates; sees better PC business

HP offers 2010 outlook in line with estimates

SAN JOSE, Calif. — Hewlett-Packard Co. said Thursday it expects to post revenue and profit in its next fiscal year in line with what analysts were expecting.

The forecast is bolstered by improving conditions in the personal computer market, which appears to be on the mend after its worst slump in years. Weakness in HP’s cash-cow printer-ink division isn’t easing as quickly, however.

HP’s company’s chief financial officer, Cathie Lesjak, told financial analysts that revenue should be between $117 billion and $118 billion in fiscal 2010, which starts Nov. 1.

HP’s profit, excluding one-time items, is expected to be $4.20 to $4.30 per share.

Analysts polled by Thomson Reuters had been forecasting sales of $118 billion and profit of $4.25 per share.

There are signs the PC industry is returning to health, which helps HP because its PC division contributes nearly a third of the company’s overall sales.

This week, Paul Otellini, CEO of Intel Corp., the world’s top supplier of the microprocessors that act as the “brains” of PCs, predicted that PC sales could rise in 2009. Otellini’s view is more optimistic than forecasts by market research firms Gartner and IDC, which are predicting a decline.

Lesjak said HP’s PC division is expected to grow 3 percent to 5 percent in the company’s 2010 fiscal year over fiscal 2009.

She wouldn’t comment on PC trends in the current quarter. She would only say that HP expects overall information-technology spending to start growing again in 2010.

“The question is clearly, how robust is it going to be?” she said.

Meanwhile, sales in HP’s printer and ink division could be flat to up just 2 percent, Lesjak said.

HP’s stock fell 6 cents to close at $46.87 before the outlook figures were announced. In extended trading the stock fell 42 cents, 0.9 percent, to $46.45.