”It’s not like rearranging deck chairs on the Titanic, it’s like re-doing the entire kitchen as the ship sinks,” says Karen Finerman with disbelief after reviewing all the latest results and developments from Hewlett-Packard .
”I don’t get it, they’re going to pay $10 billion for another company (at a valuation of) 30 times earnings when they could use that money to buy back their own shares, which are trading about 6 times earnings" Finerman exclaims. "What does that tell you?!"
”It really feels like a company that’s lost its way. I don’t think investors should go near it. It just doesn’t feel right to me," adds Guy Adami.
"I wouldn't look at it again until they start winning market share away from rivals," says Joe Terranova.
As you may know, Hewlett-Packard landed in the spotlight on Thursday, after a slew of stock moving developments flooded the Street.
- HP offered to buy British software company Autonomy for $42.11 a share, or $10.2 billion.
- HP may also spin off its PC unit and said it will discontinue the WebOS-based TouchPad tablet computer and phones.
- HP reported earnings which met expectations but disappointed with its outlook.
By the numbers, The tech giant said its fiscal third-quarter earnings excluding items rose to $1.10 a share from $1.08 a share a year earlier. Revenue rose to $31.2 billion from $30.7 billion a year ago. Analysts had expected earnings of $1.09 a share on revenue of $31.2 billion, according to Thomson Reuters.
The company's outlook fell short of expectations: HP projected earnings excluding items of $1.12 to $1.16 a share for the fiscal fourth quarter and revenue of $32.1 billion to $32.5 billion. The earnings include about 61 to 68 cents a share in restructuring costs. Analysts expected earnings of $1.31 a share on revenue of $34 billion for the fiscal fourth quarter.
"The global economy is abysmal," adds trader Stephen Weiss. And that's not just a problem from H-P but for many other tech companies, too."