HP lowers estimates on consumers

SAN FRANCISCO, May 17, (Bloomberg): Hewlett-Packard Co. (HPQ), the world's biggest personal-computer maker, forecast third-quarter profit that missed analysts' estimates after a slowdown in PC buying and reduced its full-year earnings projection. Excluding some items, earnings will be $1.08 a share for the quarter through July, Palo Alto, California-based Hewlett- Packard said today in a statement. That missed the $1.23-a-share average projection of analysts surveyed by Bloomberg. Revenue will be $31.1 billion to $31.3 billion, compared with analysts' $31.8 billion average estimate. The results came a day after a downbeat memo from Chief Executive Officer Leo Apotheker surfaced, warning of "another tough quarter" in the period that ends in July. Apotheker urged deputies to "watch every penny and minimize all hiring" in the May 4 message. Following news of the memo, Hewlett-Packard moved up its earnings report to this morning, rather than the afternoon of May 18. The pressures facing HP "aren't going away soon," Brent Bracelin, an analyst at Pacific Crest Securities in Portland, Oregon, said in an interview. Full-year earnings will be at least $5 a share, excluding some items, HP said. The company had previously predicted earnings of at least $5.20 a share. Apple Inc.'s iPad touch-screen computer and sales of smartphones are hurting demand for PCs, Bracelin said. The industry's shipments declined 3.2 percent last quarter, research firm IDC reported in April. In addition, HP's technology-services business needs to prove it can tackle companies' transition to cloud computing, in which applications and data are delivered through the Web, said Bracelin, who has a "sector perform" rating on HP shares.