HP Beats…and Misses

Hewlett-Packard’s first full quarter under CEO Leo Apotheker was a strong one. Sadly, the same cannot be said of its guidance for the current quarter.

Posting first-quarter results after the markets close today, HP reported earnings per share of $1.36–well above the $1.29-per-share the Street had been expecting. But at $32.3 billion, revenue fell short of the consensus estimate of $32.96 billion.

Second quarter guidance fell short of estimates. The company says it expects revenue in the range of $31.4 billion to $31.6 billion and earnings between $1.19 a share and $1.21 a share. Analysts were looking for guidance of $1.25 a share on revenue of $32.62 billion.

The reason for the miss: softness in HP’s consumer and services businesses. Revenue in the company’s Personal Systems Division was down one percent from last year and services revenue declined two percent year over year.

That didn’t stop Apotheker from making an enthusiastic pronouncement or two in HP’s earnings release, though. “I’m pleased with our EPS and margin expansion during the quarter,” he said. “Going forward, we have the opportunity to further capitalize on our customers’ demands for higher value-added solutions…HP has a powerful portfolio, including exciting, recently announced cloud and connectivity offerings. We are focused on leveraging these strengths to extend our leadership and accelerate growth.”

Investors didn’t quite buy it. HP shares are down more than seven percent in late trading.