Hewlett-Packard Earnings Beat, but Revenue Is Light
Hewlett-Packardreported quarterly earnings that beat Wall Street's expectations, but its revenue came in below estimates on Wednesday.
After the earnings announcement, the personal computer maker's shares initially rose but later traded nearly flat after the closing bell. (Click here to get the latest quotes for Hewlett-Packard.)
HP reported a net loss of $8.85 billion, or $4.49 per share, down from a profit of $1.9 billion, or 93 cents a share, in the year-earlier period.
The loss included a massive writedown of the value of its services business, most of which was related to its purchase of EDS.
Excluding the charge, the company posted fiscal third-quarter earnings excluding items of $1.00 per share, downfrom $1.10 a share in the year-earlier period.
Revenue fell 5percent to $29.7 billion from $31.19 billion a year ago.
Analysts had expected the company to report earnings excluding items of 98 cents a share on $30.1 billion in revenue, according to a consensus estimate from Thomson Reuters.
The company said it expects full-year earnings of $4.05 to $4.07 a share. Analysts had been expecting $4.07 per share.
HP is "still in the early stages of a turnaround," CEO Meg Whitman said on the conference call, adding that "the trajectory of the decline" in revenue flattened, which was encouraging given the current macro environment.
Macro conditions are "more challenging than we thought even two months ago" and currency will cause a 3-point headwind in the fourth quarter, CFO Catherine Lesjak said on the call.
HP's earnings release comes one day after Dell issued a full-year outlook that disappointed analysts in its quarterly report. Dell's chief financial officer Brian Gladden observed that growth in the company's PC business was challenging amid what he described as a "tough macroeconomic and competitive environment."