INDUSTRY

Supercomputer maker Hewlett-Packard Co. on Thursday posted disappointing quarterly earnings due to weak results in servers and storage products, and warned that profit in the current quarter would also fall short of Wall Street expectations. The Palo Alto, California, company, whose stock fell nearly 8 percent in trading before the market opening, said it would make management changes at its servers and storage business, which accounts for 17 percent of HP's revenue. Chief Executive Carly Fiorina said HP was satisfied with its consumer PC, printer and software business but that "these solid results were overshadowed by unacceptable execution in Enterprise Servers and Storage." The server and storage business lost money in the most recent quarter but is expected to turn a profit in the current quarter, HP said. The company posted a profit of $586 million, or 19 cents a share, for the fiscal third quarter ended July 31, up from $297 million, or 10 cents a share, a year earlier. Excluding amortization and other charges, earnings were 24 cents a share, up from 23 cents a year earlier. The average Wall Street estimate was 31 cents a share, with estimates ranging from 29 cents to 33 cents, according to Reuters Estimates. The earnings report caught Wall Street by surprise. HP had been expected to report next week, according to several corporate calendar services. HP said third-quarter revenue rose 9 percent, to $18.9 billion from $17.3 billion. Analysts' average estimate was $19.1 billion, according to Reuters Estimates. HP said it expects fourth-quarter profit of 35 cents to 39 cents a share before special items. The low end of the Reuters Estimates range is 41 cents a share. The company forecast fourth-quarter revenue of $21 billion to $21.5 billion, in line with the average estimate of $21.26 billion among analysts polled by Reuters Estimates. The operating loss at the servers and storage unit widened tenfold in the third quarter, to $208 million from $20 million a year earlier. Revenue dropped 5 percent to $3.4 billion. The company cited a number of factors for the disappointing results at the unit. It said the business pickup that usually occurs at the end of the quarter was muted. It also said it implemented a new order-processing and supply-chain system that was more disruptive than expected.