HP's Q2: Earnings on target, revenue miss; offers split update

Wall Street was looking for earnings of 86 cents per share with $25.63 billion in revenue.

Hewlett-Packard published second quarter financial results after the bell on Thursday, and the findings made for a mixed bag.

The tech giant reported a net income of $1.0 billion, or 55 cents per share (statement).

Non-GAAP earnings were 87 cents per share on a revenue of $25.5 billion.

Wall Street was looking for earnings of 86 cents per share with at least $25.63 billion in revenue.

Despite the revenue miss, CEO Meg Whitman noted in prepared remarks that she is "pleased with where we ended the quarter, the continued success of our turnaround, and the progress we're making on separation."

"Despite some tough challenges, we executed well across many parts of our portfolio, sustained our commitment to innovation, and delivered the results we said we would," Whitman wrote. "HP is becoming stronger as we head into the second half of our fiscal year and separation in November."

As for the impending split, HP provided another update about how the leadership structure will assemble following up on a previous outline released in January.

The first major takeaway is HP's chief financial officer Cathie Lesjak will continue on in her role at HP Inc., the half comprised of the Printer, Personal Systems, and Services and Solutions units.

Tim Stonesifer, currently CFO of HP's enterprise group, will serve as CFO of the fully-fledged HP Enterprise company at the time of the split.

Stonesifer will be joined by Chris Hsu, who has been tapped as chief operating officer for HP Enterprise, and Alan May as Head of Human Resources.

HP Enterprise will have its work cut out for it, based on Q2 results.

Enterprise Group revenue dropped slightly one percent year-over-year, with storage and technology services each dropping eight percent, while networking revenue plummeted 16 percent.

Enterprise Services revenue also dropped 16 percent year-over-year, while Software revenue slipped by eight percent.

There were a few upticks here and there, including Industry Standard Servers revenue up 11 percent and laptops under the Personal Systems umbrella up 19 percent.

For the current quarter, Wall Street is looking for non-GAAP earnings of 87 cents per share with $25.88 billion in revenue.

HP followed up with a Q3 non-GAAP earnings range between 83 to 87 cents per share.

Earlier on Thursday, HP announced a new partnership with Tsinghua Holdings, targeting the Chinese enterprise, storage and server marketplace.

The collaboration will come to fruition in the form of a new business dubbed H3C, a fusion of H3C Technologies and HP's China-based server, storage and technology services units. Tsinghua's subsidary, Unisplendour Corp., has agreed to buy a 51 percent stake in the new company for roughly $2.3 billion.

The total value of the H3C collaboration is pegged at roughly $4.5 billion.