• San Jose Mercury News, Thursday, February 19, 2009 10:46 AM

Hewlett-Packard, the world's largest computer maker, reports that sales of its printers, ink, personal computers and servers declined for the first quarter of 2009 as business customers and individual consumers either put off purchases or opted for cheaper HP products. It has lowered its forecast for the year, predicting a 2 to 5% decline from last year's revenue of $118.4 billion.

Sales of desktop computers fell 25%, and laptop sales declined 13%. But CEO Mark Hurd says the company slightly improved its market share. Printer shipments were down 33%, and sales of replacement ink cartridges -- traditionally a major profit center for the company -- fell by 7%.

While sales for some key product lines began to soften earlier last fall, CFO Cathie Lesjak tells the Mercury News' Brandon Bailey that other segments did not show signs of weakness until late November. The company cut overhead and other expenses, Lesjak says, but the number of engineers working in R&D has increased. "We're not cutting the critical innovation or sales resources," she says, adding that the company will continue to invest in those areas "so we emerge from this recession in a more powerful position."

Read the whole story at San Jose Mercury News »