Five Companies That Dropped The Ball This Week10:00 AM EST Fri. Aug. 24, 2012
Weak PC and printer sales to consumers, sluggish enterprise business and a technology services arm in disarray were among the many problems plaguing Hewlett-Packard in its fiscal third quarter. CEO Meg Whitman said HP's turnaround could take a while due to strong "headwinds" in HP's businesses, and the numbers backed that up.
PC market remains weak, and channel inventory is currently higher than HP would like, Whitman told Wall Street analysts. "The reality is we're locked in serious competitive battles," she said on the call.
Dell's consumer PC sales dropped 22 percent in its fiscal second quarter and revenue dipped 8 percent to $14.5 billion, as the impact of Apple's iPad once again made itself apparent. Even worse, Dell isn't expecting a big spike in PC sales next quarter when Windows 8 arrives.
"In the PC and [software and peripherals' business], the revenue deterioration was clearly above anything we expected. That's something, as we think about moving forward, we can't expect ... to happen over a long period of time," CEO Michael Dell told Wall Street analysts. "The second half of year will be challenging, but it will stabilize as we get Windows 8 in the marketplace."
Cloud gaming vendor OnLive, whose Windows 7 desktop-as-a-service incurred Microsoft's wrath earlier this year, laid off its staff and shut down after racking up between $30 million and $40 million in debt, according to the San Jose Mercury News.
OnLive said it is not shutting down, just re-organizing under a bankruptcy alternative. It has created a new company -- also called OnLive -- and re-hired some of the people it laid off, according to a report from The Verge. The bad news for investors: OnLive has few remaining assets, which means a lot of early supporters are going to be getting back a fraction of what they put in.
Apple is adding support for cellular video chatting in iOS 6 with its Facetime app, but AT&T will only extend this luxury to customers who purchase shared data plans. AT&T is being accused of net neutrality violations, but the carrier, in a letter published this week, proclaimed its innocence.
It's the latest PR disaster for AT&T, which sometimes appears to be engaged in competition with other carriers to see who can irritate their customers the most.
Tech Data reported disappointing profit and revenue figures in its second quarter, attributing the results to competitive pricing in the Americas and Europe as well as higher than expected implementation of SAP modules in the U.S.
Tech Data earned $34.4 million, or 88 cents per diluted share, on $5.96 billion in sales in the second quarter, compared to net income of $50.1 million, or $1.10 per diluted share, on $6.45 billion in sales in the year-ago quarter. Investors responded by sending Tech Data shares down $2.60 to $49.55 in after-hours trading.
"We are confident that our post-implementation efforts will return us to improved levels of profitability over the next couple of quarters," CEO Bob Dutkowsky said in a statement.