HP 1st-Quarter Income Up Less Than Predicted

Hewlett-Packard Co. said Tuesday that its fiscal first-quarter net income rose less than expected as falling prices for printers cut into profit from strong sales of personal computers.

The No. 2 computer maker said net income rose 1.9% to $929 million, or 86 cents a share, from $912 million, or 87 cents, in the year-ago period. The results were below the average estimate of 88 cents among analysts surveyed by IBES International Inc. Revenue rose 15% to $11.3 billion.

Palo Alto-based Hewlett-Packard missed expectations for the seventh time in eight quarters because of price cuts and stiff competition in the market for printers, which account for about a third of the company’s profit. With printer prices falling, HP must do more to cut costs, which have risen in recent quarters because of aggressive hiring.

“They’re still having pricing pressure in printers,” said Duane Eatherly, an analyst at Banc One Investment Advisers, which owns 2.5 million HP shares.

HP released results after the U.S. financial markets closed. Shares fell 25 cents to close at $61.63 on the New York Stock Exchange.

The company said it will consolidate and restructure some North American inkjet printer operations, a move that will save more than $100 million a year.

“We’re intensifying our efforts to control costs while investing appropriately for the future,” Chief Financial Officer Robert Wayman said in a statement.

HP said it will take charges for the restructuring, reducing earnings by about 7 cents a share during the year.

Also, because HP’s quarter ends in January, a month later than many companies’, results were hurt more by Asia’s currency and economic crisis.