Hewlett-Packard (HPQ) Beats Analyst Expectations for Fourth Quarter Earnings
Shares of Hewlett-Packard (HPQ: Charts, News) stock declined by -0.78 percent ending at 26.65 on Tuesday after the company reported better than expected earnings after the closing bell Monday afternoon. The stock initially rose four percent after the announcement in after-hours trading but subsequently dropped, ending 2.2 percent lower at $26.27.
The company reported earnings of $1.17 cents per share for its fiscal fourth quarter down from $1.33 cents for the same period last year. Revenue for the fourth quarter was $32.1 billion, versus $33.28 billion for the fourth quarter of 2010. The analyst consensus for H-P's fourth quarter earnings according to Reuters was for $1.13 per share on revenues of $32.05 billion. Daily Chart
Palo Alto, CA based Hewlett-Packard, one of the world's largest tech firms, went through some key changes during the fourth quarter. The changes included naming former EBay (EBAY
) chief executive and one time California gubernatorial candidate Meg Whitman as Hewlett-Packard's new president and CEO. Whitman took over the helm of Hewlett-Packard on September 22nd, replacing former CEO Leo Apotheker who had become increasingly unpopular as head of the company. Apotheker was asked to leave the firm after less than one year on the job for cutting sales forecasts several times and for not fulfilling promises of integrating software into mobile devices. Apotheker's mismanagement of the company, which included the takeover of UK based Autonomy Corp. - which was completed on October 3rd for $12 billion - and potentially spinning off Hewlett-Packard's PC business, resulting in Hewlett-Packard stock losing as much as 50 percent of its value. The stock has since recovered somewhat, down 36 percent this year. According to Hewlett-Packard, the company's earnings have declined by 91 percent with the company reporting a profit of $239 million, or 12 cents per share. Significantly lower than the $2.54 billion, or $1.10 per share in the same quarter last year. The drop was due in part to continued weakness in the computer business. H-P's PC business declined by 1.6 percent despite unit sales which rose by almost 2 percent including revenue from desktops which increased by 0.5 percent. Nevertheless, notebook revenues dropped by 4.1 percent while H-P's printer division revenues plunged by 10 percent. Furthermore, fourth quarter earnings included $885 million in charges involving the company's decision to downsize its web OS device business after the firm's TouchPad tablet suffered from poor sales in previous quarters. The earning's release marks the first for new CEO Meg Whitman as the company released a new outlook for 2012. Whitman decided to keep Hewlett-Packard's PC business - the world's largest - which gave the company a stronger and more stable market position. Whitman stated to CNBC on Tuesday that "I'm optimistic that we'll be able to turn this around, but we have some real headwinds going into 2012, and that's why I felt it was prudent to guide conservatively and lay out for the investor community the challenges that this company is facing." With Hewlett-Packard stock trading close to its yearly low and with the cautious optimism shared by analysts for 2012, many investors feel that the technology giant may be poised to make a comeback. Other News About HPQ H-P Offers Customers Path Away From Maligned Chip
H-P Offers to help customers shift away from Itanium chip. H.P.'s Whitman Keeps Expectations Low
CEO Whitman sees lower expectations for the company. Other Stocks in the News Netflix will lose money for all of 2012
Netflix earnings report indicates losses throughout 2012. Bank of America stock near 2-year low
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Published on Nov 23, 2011
By Jay Hawk