In an all-day set of briefings with financial analysts in California, Hewlett-Packard wrote off millions in profit from its second quarter report and had its CEO categorize the economic stall as global in nature. The latter comment drew a “no-duh” retort from some Wall Street analysts, while the loss of profits still left the company with a few cents per share in pro-forma earnings for Q2. HP had to write off a $400 million settlement to Pitney Bowes Inc, in connection with a patent violation charge which PB had levelled at HP. Nobody admitted any wrongdoing as they stopped just short of a court date on the patent charges, and now HP will be licensing the inkjet character technology that PB alleged HP had infringed upon. HP had filed its own infringement suits about Pitney Bowes in response. The $400 million goes into the “other expense, pre-tax” column of the Q2 report, so now HP shows profits of just $55 million for the period.

HP’s financial news was explained to analysts in the course of the company’s twice a year meeting with experts from the Street, and this meeting strove hard to explain why HP should stay in so many businesses while some of them have been short on profits. CEO Carly Fiorina told the analysts how HP was preparing for “what could be an extended downturn. We are seeing continued deterioration in the global macroenvironment. It is clear to us that the slowdown is now spreading to Asia and Latin America.” In what amounted to another warning about its business future, Fiorina’s remarks put HP’s future in the “flat to down 5 percent” target for revenues in the next period.

“We are becoming more convinced that this is a global IT slowdown,” Fiorina said. Sales in May across both consumer and enterprise business were soft, she added, across all regions. Extra expense controls were being put in place to anticipate the continued slowdown, and HP is looking harder at where it will pursue its new business. Analysts pressed the CEO to state how far the company would pursue more business in the PC market, a place where revenues have been climbing but profit is virtually non-existent. “I did not declare today that we are exiting the PC business,” she said. “Our PC business is not strategic to us in the way that imaging and printing is, not strategic in the way software or storage is, and therefore we’re making different choices about how much we’ll invest in that business, and how much we will chase profitless market share. Our PC business is a real good busines, and we’re pleased to have it.”

HP hoped to demonstrate through briefings from more than dozen of its top officers that its full porfolio gives the company real leverage in difficult times. Saving money by cutting expenses remains the place HP is showing the most positive financial improvements during the slowdown. Travel and entertainment expenses, for example, have been cut by $75 million in the second quarter alone. But Fiorina said HP is aware it needs to find more sales to keep its bottom line looking good to investors. “It’s not just about saving our way to profitability,” she said. “It’s about continuing to generate revenue.”