HP forecast knocks share price

Hewlett Packard shares tumbled last week after its management warned Wall Street analysts that next year's profits and turnover would be lower than expected.

Shares fell nearly 10 per cent to $60, down $6.01, on 17 November as a result of the prediction, dropping further to $58.6.

Fourth-quarter earnings for the period ended 31 October were $710 million, a drop of 12 per cent compared with $806 million last year.

The profit included a one-off charge of $170 million related to redundancies and fixed asset write-downs. Turnover for the quarter was up 3.7 per cent to $12 billion.

In the 12-month period, income was down six per cent at $2.9 billion from $3.1 billion last time, on turnover of $47 billion.

The caution was attributed to continued sluggish growth due to market weaknesses in Asia and Latin America.

Chairman and chief executive of HP, Lew Platt, said in a statement: 'Although our business in Europe is showing recovery, the environment in Asia remains weak and there are signs of slowing in parts of Latin America.'

He added: 'Our challenge in the New Year is to restore robust and profitable revenue growth across the company and we believe that we can get back on a solid growth path again.'

However, Platt insisted the quarter's figures were satisfactory: 'We've finished this year with a reasonably good quarter.'

He added that several divisions, including Laserjet printers and PCs had done quite well, despite weaknesses in the global economy.