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 LÃ©o 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.