Tumbling PC sales drag down HP profit

Hewlett-Packard said Wednesday its quarter profit was hit by a dramatic slump in sales of personal computers, while maintaining that its reorganization is making progress.

The troubled but biggest maker of personal computers said net profit in the second fiscal quarter fell 32 percent from a year ago to $1.1 billion.

The earnings amounted to 87 cents a share after adjustments, better than expected on Wall Street, sparking a rally of some 12 percent in HP stock in after-hours trade.

HP said it had quarterly revenues of $27.6 billion, down 10 percent from the prior year, or nine percent when adjusted for currency changes.

The California company has been in focus amid a severe slump in PC sales globally, and said its own PC sales in the quarter fell 21 percent from a year earlier -- down 18 percent for desktops and 24 percent for notebooks.

But chief executive Meg Whitman said HP made up in part for the slump from strong performances in services and printing.

"I am encouraged by our performance in the second quarter, and I feel good about the rest of the year," Whitman said.

"As I have said many times before, this is a multi-year journey. We have a long way to go, but we are on track" to meet profit targets.

HP fended off a challenge from China's Lenovo at the top of the PC market. But the company has acknowledged struggling in the shifting technology landscape, as consumers move away from PCs to tablets and other mobile devices.