HP turns to services as hardware sales falter

HP said Wednesday that its profit dropped 13 percent in the latest quarter, dragged down by weakness in all major business lines except services.

 Sales ticked up just 1 percent to $28.8
billion, more than $3 billion short of the average estimate of
analysts polled by Thomson Reuters. HP said its sales rose 4 percent
without currency fluctuations.

Sales in the personal computer division
fell 19 percent to $8.8 billion.

The printer and ink division, which
contributes more than 40 percent of HP's operating profit, was also
wounded, with sales falling 19 percent to $6 billion. That includes a
7 percent decline in supplies, a typically strong area that includes
things like ink cartridges, which are among HP's biggest moneymakers.

HP is fighting generic ink makers,
whose cheaper ink has become more popular as the economy has
faltered, and a trend among some businesses and consumers to print
less as a way to save money.

One bright spot for HP was its services
division, whose sales more than doubled to $8.7 billion, mostly due
to the addition of EDS.