HP earnings: Profits rise but outlook misses

HP earnings: Profits rise but outlook misses

Summary: Hewlett Packard, a company distracted and scarred by executive turmoil for the past few months, reported first quarter earnings and an outlook for the second quarter that didn't seem to settle well with Wall Street in after-hours trading.For the quarter ending January 31, the company reported non-GAAP  earnings of $1.

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Hewlett Packard, a company distracted and scarred by executive turmoil for the past few months, reported first quarter earnings and an outlook for the second quarter that didn't seem to settle well with Wall Street in after-hours trading.

For the quarter ending January 31, the company reported non-GAAP  earnings of $1.36 per share, a 27 percent jump from the year-ago quarter. Revenue was $32.3 billion, a 4 percent increase from a year ago. Wall Street analysts has been expecting earnings of $1.29 per share on revenue of $32.94 billion. (Statement)

In a statement, CEO Leo Apotheker said:

Going forward, we have the opportunity to further capitalize on our customers’ demands for higher value-added solutions. HP has a powerful portfolio, including exciting, recently announced cloud and connectivity offerings. We are focused on leveraging these strengths to extend our leadership and accelerate growth.

But looking ahead, Wall Street was hoping for more.

For the second quarter, the company said it expects revenues to be between $31.4 billion and $31.6 billion. GAAP diluted EPS will be between 99 cents and $1.01 while non-GAAP diluted EPS will be in the range of $1.19 to $1.21. Wall Street had been expecting earnings of $1.25 on revenue of $32.6 billion.

For the full year, the company said it expects non-GAAP EPS between $5.20 and $5.28 on a range of revenue between $130 billion to $131.5 billion.

The company has been distracted by executive turmoil, including shakeups around the CEO and members of the board. But, most recently, it scored some strong reviews for the TouchPad, a tablet device that shows some promise not only for HP but also the WebOS mobile operating system it inherited when it acquired Palm.

Though HP hasn't announced a launch date for the TouchPad, some blog buzz hints that the device - considered to be another contender against Apple's iPad - will be available in April.

On a call with analysts today, Apotheker said that HP is "well-positioned to lead the IT industry," noting that HP does a lot of things well. He said he plans to highlight his strategy on the future of the company - not a financial outlook, but instead a look at what the company sees in the coming quarters - at an event in a couple of weeks in San Francisco.

Specifically, the company - which suggested that the commercial PC business was still strong- was asked about its strategy is the commercial market dips the way the consumer PC market did. CFO Cathie Lesjack said that the outlook for the current quarter reflects a cautious outlook on the consumer side but Apotheker chimed in to say that commercial PC demand remains strong across all regions.

Shares of HP were down slightly in regular trading, closing at $48.23. Shares slipped more than five percent in after-hours trading.

Topics: Banking, Enterprise Software, Hewlett-Packard

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6 comments
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  • Or WebOS could be the reason outlook misses?

    here's HP throwing in yet [i]another[/i] tablet OS into the ring.

    Nothing wrong with that, and WebOs look good, but investors these days don't typically look "long term" (i.e 12 months down the road)
    John Zern
    • RE: HP earnings: Profits rise but outlook misses

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  • PC sales definitely taking a hit

    People are putting off buying new PCs in favor of the variety of tablets available. Most of them cost as much as a consumer laptop, and that money has to come from somewhere. It doesn't really matter much except maybe in the Bay Area, where HP will probably lay off another 5,000 people to make Wall Street happy again.
    terry flores
    • I don't think that's it. Dell had good revenue from PC sales

      @terry flores, so tablets really didn't effect them.

      I think they where way too distracted with all the shananigins going on over at HP
      Will Farrell
      • Could be, but they'll still lay off a bunch of people just in case

        @Will Farrell

        Also I don't see printers as a "must-have" anymore. The laser printer that I have is 4 years old and working just fine. I got rid of my inkjet instead of paying $60 for a set of two cartridges that were half-consumer before the printer even finished it's calibration print-out.
        terry flores
      • RE: HP earnings: Profits rise but outlook misses

        @terry flores
        I have to agree with the printer part. I still have the same HP printer from 6 years ago, just keeps on working because it rarely gets used. I might print on it twice a month on average.
        Will Farrell