Hewlett-Packard Makes Its Quarter, But Lowers Expectations
IT giant Hewlett-Packard just reported its earnings a day earlier than originally planned, and it’s easy to see why there was so much anxiety among senior managers. While it met its consensus reporting $31.6 billion in sales, and a profit of $1.24 a share versus a consensus view of $1.21, it lowered expectations in its outlook.
HP said it now expects to report sales of $31.1 billion to $31.3 billion in Q3. Analysts had expected sales of $31.8 billion. HP blamed effects from the Japanese earthquake, a soft market for consumer PCs, and a reduced operating profit on its services business. It also lowered its expected earnings per share to $1.08 versus a consensus of $1.24.
HP said it now expects its revenue for the full fiscal year to be in the range of $129 billion to $130 billion, and that it sees a non-GAAP EPS of at least $5.00. That’s 24 cents below the consensus. Here’s why: HP says it expects a 73 cents per-share impact on its results from restructuring and acquisition charges. Consider that another clue that layoffs are coming. The leaked memo from CEO Léo Apotheker to several key lieutenants referred to a headcount that is “unaffordable given the current pressures on our business.” With luck we’ll get more clarity on this out of the conference call.