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After Hours Action: Hewlett-Packard

Shares of Hewlett Packard plunged in extended trade after the tech titan reported revenue that was lower than expected and trimmed its full-year outlook

The world's largest technology maker reported sales of $32.3 billion in its fiscal first quarter, a 4 percent increase from $31.177 billion last year but short of the $32.96 billion that analysts expected, according to consensus estimates from Thomson Reuters.

HP Chief Executive Leo Apotheker pointed to weak demand among consumers for the sales shortfall.

"We had a couple of weaker areas in the business this quarter—one is the consumer side of the PC business, but that's a market-driven event," the executive told CNBC. "And on our services side we need to get a little bit better on our value added services, but in general we have a very strong portfolio."

Meanwhile, the company raised its forecast for fiscal 2011 non-GAAP earnings, predicting a profit of $5.20 to $5.28 a share. But it trimmed its revenue outlook to a range of $130 billion to $131.5 billion, from a previous $132 billion to $133.5 billion.

What’s the trade?

A revenue miss in an environment like this where many other tech companies knocked the cover off the ball isn’t good, explains Fast trader Guy Adami. Expect this stock to be punished.

The question for me is whether Leo Apotheker can control costs in the same way that Mark Hurd controlled costs, adds Joe Terranova.



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Trader disclosure: On Feb 22, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Seymour owns (AAPL); Semour owns (BAC); Seymour owns (F); Seymour's firm is short (FXI); Seymour owns (GM); Seymour owns (INTC); Seymour's firm is short (POT); Seymour owns (TTM); Adami Owns (AGU); Adami Owns (C); Adami Owns (GS); Adami Owns (INTC); Adami Owns (MSFT); Adami Owns (NUE); Adami Owns (BTU); Adami's wife works for (MRK); Weiss owns (AAPL); Weiss owns (AGU); Weiss owns (CSCO); Weiss owns (IPI); Weiss owns (JPM); Weiss owns (MSFT); Weiss owns (QCOM); Weiss owns (VZ); Weiss owns (COP); Weiss owns (DVN); Weiss owns (MEE); Weiss owns (BTU); Weiss owns (CNX); Weiss owns (HK); Terranova Owns (VRTS); Terranova Owns (C); Terranova Owns (UPL); Terranova Owns (GM); Terranova Owns (MS); Terranova Owns (SLXP); Terranova owns (TEVA); Terranova Owns (BAX); Terranova Owns (CVI); Terranova Owns (RSX); Terranova Owns (SU); Terranova Owns (CNQ)

For Joe Terranova
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
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For Brian Kelly
Accounts Managed By Kanundrum Capital Own (AGO)
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For Dennis Gartman
Funds managed by Dennis Gartman are long Aussie Dollars
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For Anthony Scaramucci
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For Andy Busch
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For Gene Munster
(ACOM), (DANG), (DRIV), (LOGM), (MOBI), (RLOC), (YOKU) have been investment banking clients of Piper Jaffray during the past 12 months
Piper Jaffray expects to have (DANG), (DRIV), (MOBI), (YOKU) as investment banking clients within the next three months
Other material conflicts of interest for Gene Munster or Piper Jaffray regarding companies in my universe for which I am aware include (ACOM), (DANG), (DRIV), (MOBI), (RLOC), (YOKU): underwriting
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