HP posts mixed Q1 results as revenue slips with weak Q2 outlook

HP CEO Meg Whitman stressed the "currency challenge" (a stronger U.S. Dollar) will cause a greater impact in 2015 than originally predicted last quarter.

Hewlett-Packard published first quarter results after the bell on Tuesday, and not everything was on target.

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The tech giant reported a net income of $1.4 billion, or 73 cents per share (statement).

Non-GAAP earnings were 92 cents per share on a revenue of $26.8 billion, down five percent year-over-year.

Wall Street was looking for earnings of 91 cents per share with $27.34 billion in revenue.

Despite the revenue slip and miss on the analyst target, CEO Meg Whitman once again insisted that "the HP turnaround remains on track."

"We grew operating profit margins across all of our major business segments, increased investment in innovation, and executed well across key areas of our portfolio and in our separation activities. Our progress continues as we head into Q2," continued Whitman.

Looking at the revenue breakdown by department, things weren't much better.

The Enterprise Group spanning servers, storage and networking solutions maintained a flat revenue rate year-over-year, while Enterprise Services for IT and outsourcing saw its revenue drop 11 percent during the quarter.

Financial Services, Printing and Software all experienced revenue declines in the single digits, while Personal Systems (desktop and laptop PCs) was flat year-over-year.

For the current quarter, Wall Street expects HP to deliver earnings of 96 cents per share and $26.78 billion in revenue.

But HP followed up with a softer earnings guidance range of 84 to 88 cents per share in Q2.

To this, Whitman explained the "currency challenge" (or a stronger U.S. Dollar) will cause a greater impact in 2015 than originally predicted last quarter.

"We'll work hard to offset these impacts through re-pricing and productivity, but fully mitigating currency movements of this size would require reducing investments and mortgaging our future. We won't do that," Whitman stressed.

For the full fiscal year, HP expects shares to fall between $3.53 and $3.73 a pop.