HP shocks Wall Street

Jaws dropped yesterday when Hewlett Packard told Wall Street that plummeting PC prices, weakness in Asia and rising operating expenses would, based on preliminary estimates, contribute to weaker than expected Q2 results.

HP, one of the world's largest and most successful computer manufacturers, will announce final results tomorrow - Friday 15th May - for the period ended April 30. Wall Street was told to expect earnings of around 65 cents per share compared with 75 cents per share for the same period last year. Wall Street was expecting 77 cents per share.

The announcement marks a turnaround in the company's fortunes: last month HP's stock price jumped 34 percent with investors banking on the company's ability to cope with a difficult period.

In a teleconference with analysts, Stephen J.Pavlovich, HP's manager of investor relations said: "We're not going to be out of the woods in the third fiscal quarter as far as the PC business goes."