HP profit falls as company adjusts to changing consumer tastesHewlett-Packard reported disappointing earnings this week, as the company's personal computing and printing segments failed to ignite growth.

HP is a staple in Silicon Valley, a particularly impressive feat considering its position as a destination for start-ups. Unlike its rivals, HP thrived over the past few decades, even as competition mounted amid a number of technology bubbles. However, the company has reached a crossroads, as its bread-and-butter printing and personal computing divisions are no longer fueling overall growth.

HP posted a 44 percent drop in its quarterly profit on Wednesday, citing the effects of a slowdown in sales of PCs and printers. Increasing digitization and the emergence of the tablet over the past few years have hurt sales of printers and PCs, respectively, and HP is currently working to improve profitability through business cost reduction programs and enhanced supply chain management.

Newly appointed HP chief executive Meg Whitman - whose prior managerial background included her exceedingly successful stint at eBay - is working to enhance the company's product and service offerings. With HP's net revenue declining 7 percent to $30 billion compared to the year prior, the company is feeling the effects of a contraction in business and consumer spending on computers and printers.

Whitman noted earlier in the year that she plans on improving HP's profitability through a variety of measures, including a renewed focus on spend management and indirect spend. While HP's earnings report missed analysts' expectations and underscored the challenges it faces, the company is focused firmly on the long-term, Whitman asserted.

"In the first quarter, we delivered on our Q1 outlook and remained focused on the fundamentals to drive long-term sustainable returns," she said in a statement. "We are taking the necessary steps to improve execution, increase effectiveness and capitalize on emerging opportunities to reassert HP's technology leadership."

Nevertheless, analysts and a growing number of industry experts have questioned whether the company can return to earnings growth as competition from Apple and other technology giants heats up. Tablet sales are forecast to continue to eat into those of PCs, and HP's personal computing segment is struggling under such a crowded market place. Sales at the firm's personal systems group fell 15 percent last quarter.

What's more, while HP's printing division has historically bolstered company earnings, the segment is showing signs of slowing, with the company's printing group reporting a 7 percent drop. With Whitman at the helm, HP is hoping to stage a comeback , but its future - at least now - is teeming with seemingly insurmountable obstacles, experts say.

 
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