HP sales and profit fall, but tech giant says it's poised for a turnaround

After months of bad economic news, the world's biggest technology company said Tuesday that business appears to be stabilizing — and that was enough for some industry analysts to breathe a sigh of relief.

But Hewlett-Packard CEO Mark Hurd said he's still not ready to declare that things have turned around. HP reported total sales of $27.5 billion for the quarter ending July 31, down 2 percent from a year ago, and a profit of $1.6 billion, down 19 percent. Still, those numbers were better than analysts had expected and the company itself projected in May.

"It definitely looks like the worst is behind us," said Brent Bracelin, an investment analyst at Pacific Crest Securities. "We're starting to pull out of the severe downturn you saw in the first half of the year."

Other leading tech companies, including Cisco Systems and Intel, have said in recent weeks that they believe the worst effects of the global recession are behind them. Hurd at HP has been more conservative in his assessments.
"We're encouraged by the stability we're beginning to see in the market, but we're not yet at the point where we're ready to call it a turn," Hurd said during a conference call Tuesday.

Many analysts view HP as a barometer for the overall tech industry because it sells a wide range of consumer and business products in markets around the world. It sells more personal computers than any other company and is a market leader in servers, printers and other segments.

The latest quarterly earnings report showed sales were up slightly from $27.4 billion in the previous quarter of this year, and Chief Financial Officer Cathie Lesjak predicted more improvement in the current three-month period — although "slightly below" the increase that HP typically sees in its fall quarter.