Hewlett Packard Shares Drop 12% As Revenue Forecast Is Lowered

Computer maker Hewlett Packard has lowered its 2011 revenue forecast on the back of weak PC sales, sending its shares down 12 percent.

The company, which has seen a slip in sales in the first quarter of 2011, lowered its revenue forecast for this year to $130-131.5 billion from $132-133.5 billion. The fall in the estimates arises from low PC demand and the under-performance of its IT services division.

According to the company's Q1 financial report card, overall PC sales fell by 1 percent globally while revenue from its IT services division slipped by 1 percent.

Shannon Cross, an analyst with Cross Research, told Reuters, “the net of it was you had a miss on the PC side, and that's clearly not bouncing back. People are worried about the ability of HP to show strong growth. People are probably going to look at this and expect they will need some acquisitions to drive more topline growth.”

This the first fiscal quarter for new HP CEO Leo Apothekar, who has a monumental task of fixing the slumping sales and revenue figures amidst weak consumer demand.