Hewlett-Packard Co on Thursday said quarterly earnings fell short of forecasts on weakness in computer servers and storage products, and warned the shortfall extended into the current quarter.
HP's cautious outlook added new weight to questions surrounding the resurgence in tech spending. Chipmakers and software companies have also expressed reservations about such spending.
Palo Alto, California-based HP, whose stock fell to its lowest level in 15 months in early trading, said it would make management changes at its servers and storage business, which accounts for 17 percent of HP revenue. Servers are powerful computers used to run critical systems at large businesses and organisations.
"They are fighting too many wars on too many fronts with Dell and losing," said Gabriel Lowy, analyst with Blaylock & Partners. He said he is not surprised by the earnings shortfall and has been recommending that his clients sell HP and buy Dell.
Dell Inc, which has been battling with HP for market share, is due to report quarterly earnings later on Thursday.
HP Chief Executive Carly Fiorina said the company was satisfied with its consumer PC, printer and software business but that "these solid results were overshadowed by unacceptable execution in Enterprise Servers and Storage."
The server and storage business lost money in the most recent quarter but is expected to turn a profit in the current quarter, HP said.
The company posted a profit of $586 million, or 19 cents a share, for the fiscal third quarter ended July 31, up from $297 million, or 10 cents a share, a year earlier.
Excluding amortisation and other charges, earnings were 24 cents a share, up from 23 cents a year earlier.
The average Wall Street estimate was 31 cents a share, with estimates ranging from 29 cents to 33 cents, according to Reuters Estimates.
HP said third-quarter revenue rose 9 percent, to $18.9 billion from $17.3 billion.
Revenue from the PC business grew 19 percent in the quarter, services 12 percent and software 17 percent.
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