HP’s first quarter earnings down 38 percent year over year

HP just announced a fairly brutal (though still profitable) quarter of financial results, anchored by GAAP earnings which were down some 38 percent to $1.5 billion versus the same quarter a year prior. Revenue, meanwhile, was off just 7 percent, and HP’s lumping much of the downward trend in earnings into higher “cost of sales” (the company isn’t taking any hit from the wind-down of the webOS business this quarter). Recently-installed CEO Meg Whitman says that they’re “taking the necessary steps to improve execution, increase effectiveness and capitalize on emerging opportunities to reassert HP’s technology leadership.”

Most unsettling, perhaps, is that the Imaging and Printing Group — long a cash cow for HP — is down 7 percent year over year in revenue, and consumer devices specifically are down some 15 percent. Is it possible that end users are finally weaning themselves off paper and going all-digital, are printers lasting longer, or is HP simply losing ground to the competition?