PALO ALTO, California, Aug 12 (AFP) - Computer giant Hewlett-Packard said Thursday quarterly profit crashed below market forecasts, blaming management and a "stutter-step" in the economy.
Its shares plunged.
"I think it's fair to say that in the you know last month or so of the quarter the economy did a little bit of a stutter step," HP chairman and chief executive Carly Fiorina said.
"That is why we did not see the normal acceleration in demand towards the end of the quarter," she added.
Fiorina said she believed it would be correct to remain "relatively conservative" about spending on information technology.
In an unexpected "preliminary" report, HP said earnings per share, excluding one-off items, edged up just one cent from a year ago to 24 cents in the three months to July 31.
The result came in far below the 31 cents expected on Wall Street.
For the fourth quarter, too, HP predicted earnings per share of 35-39 cents, whereas analysts had been expecting 43 cents.
In electronic trade before Wall Street opened, HP shares plummeted 2.12 dollars, or 10.86 percent, to 17.40 dollars.
Under accepted accounting rules, HP said net profit more than doubled to 586 million dollars when compared to the weak year-earlier period when it made 297 million dollars.
Sales rose 8.9 percent to 18.89 billion dollars over the same period.
But when compared to the previous quarter, net profit was down 33.7 percent, and sales fell 3.9 percent.
"Although we are satisfied with our performance in personal systems, imaging and printing, software and services, these solid results were overshadowed by unacceptable execution in enterprise servers and storage," Fiorina said in a statement.
"We therefore are making immediate management changes. We are also accelerating our margin improvement plans in this business. With these changes, we expect our server and storage business to return to profitability in the fourth quarter," she said.
Business servers -- computers that provide network services such as email -- had been hit by a disruptive change to the company supply system and "overly aggressive" discounting in Europe, HP said.