PALO ALTO, Calif., Hewlett-Packard Company (NYSE: HWP) today announced that based on worsening economic conditions and a deceleration in corporate and consumer IT spending in recent weeks, primarily in the U.S., the company no longer expects to meet previous first quarter guidance. The company now expects to achieve earnings per share in the range of 35 to 40 cents for its first fiscal quarter ending Jan. 31, 2001.
Carly Fiorina, chairman, president and chief executive officer, said, "Underlying the financial guidance we provided in early December were core assumptions about the condition of the consumer and enterprise IT marketplaces. We anticipated a slowdown in U.S. consumer IT spending and continued strength in enterprise IT spending, all in the context of the prevailing view that the U.S. economy was headed toward a soft landing.
"It's clear there's been a significant change in market conditions in recent weeks. Consumer spending in the U.S. has been below even our own conservative estimates and our enterprise customers -- responding to the growing economic uncertainty -- have become increasingly cautious about IT spending.
"We believe conservative growth assumptions are appropriate near-term. Therefore our revenue guidance for Q1 is in the low- to mid-single-digits and we're not counting on improvement during the first half of our fiscal year ending April 30. Our gross margin guidance is at the low end of the 27.5 to 28.5 percent range we previously provided, with expense growth in line with revenue growth. Given rapidly changing market conditions and increasing economic uncertainty, at home and abroad, we're refraining from providing an update to full-year guidance at this time.
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