Shares jumped 4.1 percent to $45.09 after hours as adjusted per-share earnings topped the company’s expectations. The stock is up 15 percent since the start of the year.

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The Chicago-based startup, which uses computers to turn structured data sets into prose, has raised an undisclosed amount of funding from In-Q-Tel, the venture firm that invests on behalf of the Central Intelligence Agency.* The money comes along with a deal to put Narrative Science’s automated writers to work for the CIA and “the broader intelligence community.”

Narrative Science had previously raised $6 million. While it made its initial splash by figuring out how to create sports stories based on box scores, without the need for human intervention, it has been making most of its money creating prose most people won’t ever see: Daily reports for the likes of financial services firms, or a large fast-food chain, etc.

But I still think the notion of automated stories for newspapers and other publishers is both fascinating and unsettling, so I like to keep in touch with the company, even as it focuses on enterprise sales.

If you’d like to see an example of their stuff, you can head to Forbes, which is using Narrative Science to create automated earnings reports and previews, like this look-ahead at Smucker’s prospects for tomorrow.

And as far as the CIA and like-minded agencies, you can imagine lots of places where Narrative Science could go to work. Those guys have a lot of data, and it would probably be helpful to have some of that sorted into sentences and summaries. It would be great to show you an example of that work, but obviously that’s not gonna happen.

But here’s a fun scene from “Homeland.” No computer could have created that eye thing Claire Danes does:

* Normally I don’t bother to write about funding rounds where the companies won’t tell you how much money they’re raising. But then again I don’t normally write about the CIA taking equity stakes in the startups I cover. First time for everything!

Zynga confirmed it was laying off 18 percent of its workforce — which represents 520 employees — in a bid to reduce costs, as it seeks to drastically restructure its troubled business.

The move today will affect every part of the San Francisco social gaming company, cutting $80 million in staff costs for its 2,900 current workers. It will also include the closing of its offices in New York, Los Angeles and Dallas, as well as other infrastructure costs, adding to the total expense reduction.

Zynga continues to have big offices in San Francisco; Beijing, China; and Bangalore, India, as well as several small units across the U.S. (such as Seattle and San Diego).

Sources said that severance benefits will extend for several months and include some acceleration of stock options.

In addition, Zynga has now said in a press release that it is downgrading its investor guidance for the second quarter with results at the lower end of what Wall Street has been expecting.

After a rocky IPO and trying to cope with rapid changes in its core businesses, Zynga has been trying to refocus the company’s franchises and network on the shift to mobile and a narrowing of focus at the company.

That refocusing will now have a big impact on Zynga’s financial performance. For Q2, the company had previously said its “bookings” — related to sales of in-game virtual-good purchases and advertising — would be in the $180 million to $190 million range. Today, Zynga said results would now be in the lower half of that range.

In addition, its GAAP net loss for the quarter will be higher than expected, rising from a loss of $26.5 million to $36.5 million to a loss of between $28.5 million and $39 million.

All other metrics are expected to remain the same, including: Revenue ($225 million to $235 million); earnings per share (a loss of three to five cents); adjusted EBITDA (break even to a loss of $10 millon); and non-GAAP EPS (a loss of three to four cents).

Wall Street is not reacting well to the bad news. Zynga’s shares have dropped from 11 to 12 percent since AllThingsD.com broke the news of the layoffs. It is now at about $3 a share, giving the company a market valuation of $2.4 billion. Trading for Zynga was briefly halted, before the company confirmed the cost cuts.

Lenovo’s solid results stand out in the global PC industry, which is struggling with weak demand as more consumers turn to tablet computers and smartphones. Global PC shipments in the first quarter fell 14 percent from a year earlier, according to research group IDC.

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But in a short phone interview with AllThingsD, CEO Meg Whitman and CFO Cathie Lesjak reiterated what they said on a conference call with analysts: Progress has been made, but there’s still a lot of work to be done.

AllThingsD: Meg, let’s talk about the state of the competitive environment. We heard some pretty tough results from Dell last week, and you said on the call that HP was choosing to pass on some deals in order to protect profit margins. Tell me a little more about that.

Whitman: For the long term, profitability remains a focus for us because we can’t afford to let our profitability crater the way Dell did. We have to have the ability to invest in the next generation of PCs and servers and software. It was a tough quarter. We walked away from several deals and lost some share. But it felt like we did the right thing in going after the deals that were the right deals for us. There were also some execution issues. We have to make sure we have the right product for the right customers at the right price point. And particularly at the low end, I think we could do a better job there. But overall I’m reasonably pleased that we made the right decisions in the PC business.

Dell was also making a lot of noise about industry standard servers and how it took some share away from HP. Was it a similar dynamic in servers as it was in PCs?

Whitman: Yeah. We saw what happened to Dell’s earnings. They were down 75 percent. If they were a publicly held company that was trading freely in absence of a buyout number, the stock would be down by 50 percent. It would be ridiculous. We are a publicly held company and we have to invest in the long haul. So we had to choose to walk away from some deals in hyperscale and industry standard servers and PCs that didn’t make sense for the company. I feel like we did the right thing, but there’s always something you can learn from these things.

How do you feel about competing against a privately held Dell versus a publicly held Dell? We saw some indication of how it might behave in the marketplace this quarter. Do you think you’re going to have more of this aggressive pricing behavior and so on?

Whitman: I don’t know exactly how their behavior is going to change. But remember, they’re loading a lot of debt onto the company. And remember how LBOs work. The key is to pay off the debt quickly so you can take the company public again and make a lot of money. We’ll see if they remain as aggressive as they have been. But frankly, this is just a competitive business. We have a lot of competition. We have shown that we can win over time whether it’s against Acer or other manufacturers that we beat out. So if it’s Dell or anyone else, we have to have continuous improvement. We have to invest in the right products. We have to streamline our go-to-market strategy, we have to constantly refine our supply chain and we have to be more agile. And that is just part of being in the business.

Lesjak: And we’ve shown that by being No. 1 in the market for industry standard servers for many, many years now, and we’ve been competing against Dell that entire time.

Cathie, there was a lot of talk on the call about reducing HP’s debt. Give me a look ahead as to what changes when that debt comes down to approaching zero, then what happens?

Lesjak: It frees us up to step back and look at what we want to do with the cash we’re generating, and we want to make sure we’re making the right kind of investments. Those investments may be in buying back shares, or capital expenditures, or research and development to get us on track for the future, or to make small M&A deals. And we want to evaluate these all on a returns basis, both in the near term and in the long term. Because you really need to do both. Some decisions will be based on the near term and with some we’ll be willing to wait a long time for the returns because they’ll be worth it. This is actually one of those moments when we’re going through a lot of product transitions, where the new style of IT products are coming in and the older style products are going away. And what we really want to be able to do, instead of having to manage big transitions, we want to get through them more quickly and that means that you have to invest for the short term and long term.

Whitman: I’ve been saying this a lot lately: You have to plant acorns before you have oak trees. And I think with a lot of the CEO transitions, we didn’t plant enough acorns. And now we’re paying that price.

So part of the impression I got from this quarter and last is that you’re able to beat the Street expectations in part because you’re able to manage your cash flow very tactically. You did well with cash flow for the first half of the year and you said on the call that you don’t expect it to remain as strong in the second half. With the macro environment remaining so weak, I come away thinking that your success is really less about products and lines of business and right now more about managing and taking out costs. Is that fair?

Lesjak: I’d sum it all up to operational excellence. You have to do this all the time. I mean, we’re in a competitive industry. Margins are tight and you have to be maniacally focused on managing your costs every minute, and making sure you’ve got the right product in the right place at the right time. I think this has to be part of the DNA of the company. There’s no moment when you exhale and then you get to spend more. This is about being focused all the time and bringing that discipline to the company. Now in the second half we have some extraordinary cash payments to make around taxes and restructuring payments. As well as some cap-ex that we think will be good investments for the future.

Is there any indication that the macro environment is going to improve? We’re seeing the worst environment for PCs pretty much ever, and IT spending generally isn’t looking so good. Do you sense any improvement in either?

Whitman: From a macroeconomic perspective, which is what drives IT spending across small businesses, medium ones and big enterprises, I think the environment remains about the same. I could be wrong here. We don’t see any improvement coming in Europe and we don’t see an improvement in the U.S. So we’re not counting on those as tailwinds or headwinds, but really more of the same. PCs are a little different. PCs are a subset of personal systems, and as you know that business is growing generally with all the tablets and mobile devices. It’s possible the PC growth rate doesn’t decline as much. It may continue or it may flatten. The objective is that when it starts to flatten out, whose is the company with the best products and the company best-positioned to gain share. We want it to be us.

Lesjak: Taking advantage of the fact that tablets are a growing segment, you really look at HP’s position in tablets, and that will improve significantly in the second half of this year. We’ve got the Slate 7 Android consumer tablet and the Elitepad commercial tablet. Those ramp in the second half, so we’ll have some help on the top line. Not so much in the PC business but personal systems.

Project Moonshot launched during the quarter and there’s a sense that there’s a lot of hope riding on that product. When does it start shipping in earnest for revenue? Is that a 2014 story?

Lesjak: It really ramps in the second half of this year but it’s more of a 2014 story. The real material benefit is 2014 and 2015. IDC has done some projections that the Web and cloud services business will grow about 19 percent in 2016. So that works out to about 8-10 million servers between now and then. So that’s the market that Moonshot is going after.

Whitman: You also have to remember that the ramp is slower with these enterprise products than with the consumer products. Big enterprises need to bring them in and do a proof of concept and see what workloads they want to run on them. And then they have to prove it out. Enterprises move more slowly, but when they move, they move big. But the ramp is slower than the the consumer product.

What’s your biggest priority for the rest of the year now, Meg?

Whitman: We continue with our restructuring program. We said it was going to be a three-year program, and we’re about halfway through that timeline. So there’s more work to do there. And to Cathie’s point, it becomes part of the DNA. This is what we do in the normal course of business. We also have to manage the transition between the new products and the older products. We’d like to accelerate the growth of the new products if we can.

And you said on the call, despite all these market headwinds, you think you can grow next year.

Whitman: We do. We continue to believe that growth is possible next year. You’ve got to remember, we’re doing this amid some of the biggest transitions that have hit the IT industry in a generation. The macro environment is not going to help. The delayed runoff in enterprise services helps this year but hurts next year. But we think we can grow. It depends on a lot of different factors. To be clear, we expect EPS growth in 2014 regardless.

What’s your latest thinking on Autonomy? Is that part of the operation where it should be?

Whitman: I think Robert Youngjohns and his team have done a great job of stabilizing Autonomy. We’ve put in some systems that were lacking and we’ve changed our go-to-market. We’ve invested in R&D jobs there. We had 50 openings for research jobs there recently and I suspect that most of them have been filled by now. So I’m pleased with the progress. That team went through a lot, so I have to give them a shout-out. They had some difficult circumstances. And I’m pleased with what they’re doing. I think you’re going to see Autonomy grow in the next few quarters.

You still having fun, Meg?

It is fun. The senior team feels like they’re making a difference. The turnaround is on schedule. Obviously there are lessons learned every quarter, but we feel good about where we are.

A conference call with analysts concluded just a little while ago. On it, CEO Meg Whitman and CFO Cathie Lesjak reiterated that the turnaround roadmap they outlined at a meeting last year is still going about as expected, and that it is and will remain a multi-year plan. They’ve focused a lot of energy on paying down HP’s debt and improving its operations while making the investments to inject new life into its products lines.

There were also questions about HP’s decision to avoid fighting Dell in the PC business over pricing. Dell has recently said it was getting aggressive in order to take share, while HP has apparently decided to hold on to its profit margins at the expense of sales volume.

It will also be worth listening for hints of and adjustments in the strategy and timing of the turnaround plan put in place by CEO Meg Whitman and outlined at last year’s analyst’s meeting.

Also, HP earlier today released a video with Whitman summarizing the highlights of the quarter’s results.

Here’s a partial transcript of the conference call.

2:06 pm: Joining the conference call in progress. Meg Whitman is speaking. She just said that Europe will continue to be challenging and that China is starting to slow down.

Meg says revenue run-off in Enterprise Services will be slower than expected and will affect overall revenue in 2014.

In the Enterprise Group: Converged infrastructure is the future. Also, the two server groups are being merged into one. Project Moonshot lost during the quarter, but it will “take time to ramp.” But she’s confident that it will work to HP’s advantage without cannibalizing the existing server business.

In networking, HP is a strong number two after Cisco Systems, and its switching revenue is as much as the next five competitors combined, she says.

In software, Autonomy is stabilizing, and Vertica is looking good. The business is “well positioned.” Autonomy landed All Nippon Airways as a customer.

Now she’s speaking about areas where HP’s performance needs to improve. PCs is an area where it needs to fight harder. In mainstream servers, HP suffered from the conditions of the market and was tripped up “by our own execution.”

In PCs, “We stepped away from many deals to protect our bottom line.”

One key difference between the first half of this year and the first half of last year was that the PC industry roared back to life after hard drive supplies were disrupted by the flooding in Thailand.

2:16 pm: Whitman: “Overall our turnaround made progress in the second quarter.”

Now CFO Cathie Lesjak is speaking, and she’s running through the numbers again.

“IT spending softened and the macro-environment clearly did not improve.”

Revenue in most geographic regions was all down.

Software was down some as the industry is shifting to SAAS, Lesjak says.

2:29 pm: Revenue was down in financial services.

Lesjak is now talking about capital allocation and the balance sheet: We delivered more than $5 billion in the first half of the year, which is ahead of our previous guidance. But we do not expect this pace to continue.

Outlook: We remain confident in our ability to manage our cost structure. We are still on track to achieve the savings we’ve planned, but some business units are using these savings.

Moonshot launch was very successful, but we are not pleased with performance of x86 server sales. Printing continues to perform well.

Generally Lesjak expects lower restructuring expenses. “We now expect 2013 free cash flow to be about $7.5 billion.”

2:35 pm: Now time for Q&A. First question is from Katy Huberty of Morgan Stanley. Do you still think you can get to revenue neutral in services?

Whitman: We are rebuilding ourselves amid some of the most profound changes to hit the technology industry in a generation. The slower run-off in revenue will hurt us, but if 3Par and other business units perform as we expect, we expect to grow in 2014, but there will still be headwinds.

Whitman talked about some options for capital allocations. She says it’s mostly going to be “returns based,” meaning a bias toward share buybacks and dividends, and not M&A activity.

Question from J.P. Morgan. Again about services. What is your confidence in the planned services leakage events happening in 2014? Can you still unwind these planned attrition events? Basically he’s asking if some ineffective service contracts will get fixed.

Whitman: There is some predictability coming that was not there in 2012. “The control of this business is feeling better than it did before.”

Whitman: “We are fixing a lot of the problems that are keeping HP from being great. … This takes time. This is an enormous organization.”

Question from Sanford Bernstein: Could you clarify your plan for balancing profitability vs. growth? What is the near to medium term focus on share or profitability?

Whitman: We’re here to set this company up for the long term. In ISS (industry standard servers) we did walk away from some deals that weren’t profitable. In terms of Technology Services, one big headwind was the attach rate of support to sales of Business Critical Services (BCS, a.k.a. the Itanium server business).

Lesjak: We may well be more aggressive in pricing on an industry standard server if we’re getting attached to TS. We’ll take a lower margin based on the complete picture, and the long-term outlook on the account.

Question from Shannon Cross. More color on currency effects. Also pricing on the printer front from the Japanese companies.

Lesjak: Currency is about a point to revenue. It had been two points. “HP is exposed to a whole basket of currencies, and we have different hedging strategies.”

2:49 pm: Lesjak: We think our cost savings in the second half are creating a war chest for our Japanese competitors.

Whitman: We’re going to use that opportunity to fight back. Our competitors are more cost competitive because of what has happened to the yen.

Whitman: “The days of ever-escalating IT budgets in government are over.”

3:03 pm: That’s it. Thanks for tuning in.

Per-share earnings were 87 cents, down 4.4 percent from a year ago on sales of $27.6 billion, which amounts to a decline of 11 percent from last year.

The results are better than the consensus view of analysts, which had called for EPS of 81 cents on revenue of $28.12 billion.

The company said it expects to earn between 84 cents and 87 cents per share in the current quarter and to earn between $3.50 and $3.60 per share for the full year.

As expected, PC sales were pretty bad, with sales down 20 percent and a decrease in volume of 21 percent, which was much worse than Dell’s results reported last week. The PC unit generated a 3.2 percent operating margin.

Printing revenue declined by 1 percent, though operating margins were up to nearly 16 percent. Sales of commercial units fell 5 percent year over year (I think that’s unit sales basis) and consumer units fell 13 percent.

Revenue in the enterprise group declined 10 percent. Networking grew 1 percent. Server sales were down 12 percent in the industry standard group, while business critical servers — the ones using Intel Itanium chips once so crucial to HP’s profit profile — were down 37 percent. Storage revenue fell 13 percent.

Enterprise Services fell 8 percent. Software sales were down 3 percent.

HP said it finished the quarter with $13.6 billion in cash, and had $3.6 billion in operating cash flow. It paid a dividend of 14.52 cents per share, up 10 percent from a year ago.

HP shares are rising in after-hours trading. As of 4:17 pm ET, they were at $23.78, up 12 percent from the close of today’s regular trading session.

Here’s HP’s original announcement.

PALO ALTO, CA–(Marketwired – May 22, 2013) – HP (NYSE: HPQ)
Second quarter non-GAAP diluted earnings per share of $0.87, down 11% from the prior year, above previously provided outlook of $0.80 to $0.82 per share
Second quarter GAAP diluted earnings per share of $0.55, down 31% from the prior year, above previously provided outlook of $0.38 to $0.40 per share
Second quarter net revenue of $27.6 billion, down 10% from the prior year and down 9% when adjusted for the effects of currency
Cash flow from operations of $3.6 billion, up 44% from the prior year
Returned $1.1 billion in cash to shareholders in the form of dividends and share repurchases
Improved operating company net debt position by $1.8 billion, the fifth consecutive quarterly reduction of over $1 billion
Declared a regular quarterly cash dividend of 14.52 cents per share on the company’s common stock

Information about HP’s use of non-GAAP financial information is provided under “Use of non-GAAP financial information” below.

HP today announced financial results for its second fiscal quarter ended April 30, 2013. Second quarter GAAP diluted earnings per share (EPS) was $0.55, down from $0.80 in the prior-year period and above its previously provided outlook of $0.38 to $0.40 per share. Second quarter non-GAAP diluted EPS was $0.87, down from $0.98 in the prior-year period and above its previously provided outlook of $0.80 to $0.82 per share.

Second quarter non-GAAP earnings information excludes after-tax costs of $621 million, or $0.32 per diluted share, related to restructuring charges, amortization of purchased intangible assets and acquisition-related charges.

For the second quarter, net revenue of $27.6 billion was down 10% year over year and down 9% when adjusted for the effects of currency.

“We beat the upper end of our non-GAAP diluted EPS outlook for the quarter by $0.05 per share, driven by better than expected performance in Enterprise Services and Printing, coupled with the accelerated capture of restructuring savings and improvement in our operations,” said Meg Whitman, HP president and chief executive officer.

Outlook

For the third quarter of fiscal 2013, HP estimates non-GAAP diluted EPS to be in the range of $0.84 to $0.87 and GAAP diluted EPS to be in the range of $0.56 to $0.59. Third quarter fiscal 2013 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $0.28 per share, related primarily to the amortization of purchased intangible assets, restructuring charges and acquisition-related charges.

For the full year fiscal 2013, HP estimates non-GAAP diluted EPS to be in the range of $3.50 to $3.60 and GAAP diluted EPS to be in the range of $2.50 to $2.60, in line with HP’s previously communicated outlook. Full year fiscal 2013 non-GAAP diluted EPS estimates exclude after-tax costs of approximately $1.00 per share, related primarily to the amortization of purchased intangible assets, restructuring charges and acquisition-related charges.

“I am encouraged by our performance in the second quarter, and I feel good about the rest of the year,” added Whitman. “As I have said many times before, this is a multi-year journey. We have a long way to go, but we are on track to deliver on our fiscal 2013 non-GAAP diluted earnings per share outlook.”

Asset Management

HP generated $3.6 billion in cash flow from operations in the second quarter, up 44% from the prior-year period. Inventory ended the quarter at $6.0 billion, down 2 days year over year to 26 days. Accounts receivable of $14.6 billion, down 1 day year over year to 48 days. Accounts payable ended the quarter at $12.3 billion, up 4 days year over year to 53 days. HP’s dividend payment of $0.132 per share in the second quarter resulted in cash usage of $283 million. HP also utilized $797 million of cash during the quarter to repurchase approximately 36.3 million shares of common stock in the open market. HP exited the quarter with $13.6 billion in gross cash.

“After returning more than a billion dollars to shareholders through share repurchases and dividends in the quarter, we improved our operating company net debt position for the fifth successive quarter,” said Whitman. “By the end of fiscal 2013, we expect our operating company net debt to be below pre-Autonomy levels and approaching our goal of approximately zero.”

Declaration of Dividend

HP also today announced that the HP board of directors has declared a regular cash dividend of 14.52 cents per share on the company’s common stock, which, as previously announced, reflects a 10% increase in amount compared to the previous quarterly dividend amount. The dividend, the third in HP’s fiscal year 2013, is payable on July 3, 2013, to stockholders of record as of the close of business on June 12, 2013.

Second Quarter Fiscal 2013 Segment Results

Personal Systems revenue was down 20% year over year with a 3.2% operating margin. Commercial revenue decreased 14%, and Consumer revenue declined 29%. Total units were down 21% with Desktops units down 18% and Notebooks units down 24%.

Printing revenue declined 1% year over year with a strong operating margin of 15.8%. Total hardware units were down 11% year over year. Commercial hardware units were down 5% year over year, and Consumer hardware units were down 13% year over year.

Enterprise Group revenue declined 10% year over year with a 15.9% operating margin. Networking revenue was up 1%, Industry Standard Servers revenue was down 12%, Business Critical Systems revenue was down 37%, Storage revenue was down 13% and Technology Services revenue was down 3% year over year.

Enterprise Services revenue declined 8% year over year with a 2.6% operating margin. Application and Business Services revenue was down 10% year over year, and IT Outsourcing revenue declined 6% year over year.

Software revenue was down 3% year over year with a 19.1% operating margin. Support revenue was up 12% while license revenue was down 23% and services revenue was down 5% year over year.

HP Financial Services revenue was down 9% year over year with a 3% decrease in net portfolio assets and a 24% decrease in financing volume. The business delivered an operating margin of 11.0%.

More information on HP’s earnings, including additional financial analysis and an earnings overview presentation, is available on HP’s Investor Relations website at www.hp.com/investor/home.

HP’s Q2 FY13 earnings conference call is accessible via an audio webcast at www.hp.com/investor/2013Q2webcast.

At the outset, it seems a tall order. Name a significant line of HP’s business and it’s probably in the middle of one sort of fundamental slowdown or another. Whether it’s the historical decline in PC sales, a weak environment for server sales, a lousy market for printers or ongoing difficulties with its enterprise services business, HP has troubles in all four. Together, these troubled units accounted for about 92 percent of HP’s sales last quarter. Add to the mix a significant exposure to Europe, where the economy remains weak, and it becomes incredibly difficult to feel hopeful for a pleasant surprise in HP’s results today.

Whitman and CFO Cathie Lesjak have been clear in past public statements that there are no quick fixes for HP. And its rivals are taking advantage. Dell unleashed a bit of a price war on the PC front, cutting prices aggressively in order to take some market share ahead of its anticipated $24.4 billion go-private transaction.

While Dell is willing to sacrifice profitability, HP doesn’t seem to have responded, and so may have missed some sales. As Chris Whitmore of Deutsche Bank Securities wrote in a note to clients yesterday, “It appears HP is sacrificing share to protect near-term margins.”

Dell has also been bragging about its ability to take market share away from HP on the server front.

What HP has got going for it: Aggressive cost management. Remember that HP surprised the Street with better-than-expected cash flow in the first quarter of the year, giving the appearance that the promised turnaround had begun in earnest. But much of that surprise came from a one-time tax benefit that added a half-billion dollars to operating cash flow. That is unlikely this quarter, so Whitmore is worried that cash flow may come up short: “The combination of cash restructuring payments, headwinds from revenue declines in PCs impacting working capital and cash cycle and the absence of favorable factors in Q1 (tax deferrals, bonus payments, etc) may result in worse than expected cash flow,” he wrote.

Analysts expect HP to report 81 cents per share on sales of $28.12 billion. A miss on either the top or bottom line will probably freak out shareholders impatient to see some tangible sign that, despite having survived the worst year in its history, HP can yet be salvaged, and that Whitman is the one to get the job done. HP shares opened up slightly this morning at $21.21 a share.

I talked about all this a little this morning on CNBC. The video is below:

For the current quarter, the company expects adjusted per-share earnings of three cents to seven cents on revenue of $702 million to $727 million. Analysts surveyed by Thomson Reuters were expecting per-share earnings of 11 cents on $727 million in revenue.

Read the rest of this post on the original site »

The Richfield, Minn., company reported another quarterly loss driven by weaker sales in its European business, which it recently shed. The company last month sold the rest of its stake in Best Buy Europe back to Carphone Warehouse Group PLC for about $775 million to help shore up its profitability.

Read the rest of this post on the original site »

Earnings per share were at 21 cents, a whopping 14 cents below the consensus view, while revenue, at $14.07 billion, was above the forecast by about a half-billion dollars.

During a conference call with analysts that wrapped up just a little while ago, Dell management struck a tone of sticking to its strategic guns. With the PC market contracting fast, it has gotten selectively aggressive on pricing in order to try and take share away from rivals like Hewlett-Packard and Lenovo. At the same time, the results show growth in expenses like research and development spending that aren’t exactly helping gross margins.

In short, Dell is starting to act a lot more like the privately held company it expects to be before the summer is over, accountable only to its owners.

In their questions, analysts sought to tease out what details they could about the effect of the proposed go-private transaction on things like employee retention and relationships with key customers. CFO Brian Gladden and head of investor relations Rob Williams shot those questions down.

Here’s a summary of the substance of the conference call (all times are Pacific):

1:46 pm: On hold waiting for the conference call to begin with what sounds like some Vivaldi playing in the background.

And now things are getting under way.

Standard conference call boilerplate from head of investor relations Rob Williams.

Brian Gladden is speaking. “We continue to invest in strategic capabilities.” He’s talking about the acquisition of Entratius, which closed last week.

Gross margin was down 40 basis points sequentially.

“We continue to face a competitive pricing environment … and this has affected our profitability.”

Selling and general costs were up 4 percent.

R&D spending is up 33 percent.

Gladden: There were almost $90 million worth of expenses related to the go-private transaction that were excluded from the non-GAAP figures.

1:54 pm: Tom Sweet is talking about business segments. Here comes the news on server sales that Michael Dell said was going so well.

Servers, Networking and Peripherals saw sales grow by about 10 percent, but sales of storage fell about 10 percent.

Sweet: “Dell powers four out of the top five search engines and 75 percent of the top social media sites worldwide.”

Sweet is covering a few customer wins. And now he’s on to software. Revenue was $295 million and had an operating loss of $85 million. “We remain confident that the Quest acquisition (which was $2.4 billion) will be accretive by FY 2015.

Sweet is talking about End User Computing, a.k.a. the PC segment, and says the environment continues to be competitive. The plan is to try and cut $1 billion out of operating costs by 2015. But customers are “diverting spending to alternative mobile solutions.” Does he mean iPads? Yup.

2:01 pm: Sweet is talking about a big PC win with Marsh and McClennan that has 55,000 seats. “We won despite a key competitor that was a longtime incumbent.” Who? HP maybe?

Question and Answer session is getting underway. First is Katy Huberty from Morgan Stanley. “Can you step back and say if the margin decline is what you expected when you rolled out the more aggressive pricing strategy?”

Gladden: We’ve been talking about this for a few quarters, the need to adjust pricing. There are parts of the business where we are beginning to see some elasticity. Demand has been weaker than expected. These are accounts that we’re gaining that we feel good about their profitability. We feel for the long term we think it’s the right thing to do. If you look at the share dynamics, we did improve our share position in a market that is pretty tough.

A question from Tony Sacconaghi of Sanford Bernstein: Is there a minimum level of profitability that you are willing to sustain in an effort to hold or gain share? Also a question about cost-cutting.

Gladden: Without providing details of specific initiatives, we have continued to take cost out of the business. We are choosing to reinvest those dollars in sales and R&D. I think those things are going on concurrently. (Essentially what he’s saying is that Dell is acting like it’s a private company already.)

As Gladden is speaking I’m looking at the slide presentation. The worst geographically was Asia-Pacific, where sales fell 12 percent year on year. Ouch. Sales in the Americas were up slightly. The BRIC countries fell 17 percent, led by China which fell 24 percent. Super ouch.

Maynard Um: Are customers holding out given the go-private transaction?

Gladden: The customer base has been very supportive of the company. For the conversations I have been a part of they have resulted in many opportunities for the company.

FYI Dell share price update: In after-hours, Dell is trading at $13.37, which is 28 cents below the $13.65 that Michael Dell and Silver Lake have offered shareholders to take it private.

2:11 pm: Question from Steve Milunovich from UBS. He’s asking about changes in sales model on PCs that’s expected as Dell goes private.

Gladden: I wouldn’t say our strategy has changed at all. We’ve adjusted our pricing accordingly and expanded our offerings across the portfolio. This is not a new strategy or business model for us. It’s adjusting tactics given where the market is going.

Question from Credit Suisse: In terms of pursuit of new PC customers, have you put the investments in that you need to or is there more effort to come through?

Gladden: Basically says the strategy hasn’t changed.

Question from Deutsche Bank, asking about servers and the storage business. Servers are good but he says storage doesn’t seem to be getting good attach rates.

Gladden: With servers, we’re winning in the marketing. And when you look at density-optimized servers, we’re winning. We feel good about the server business. You don’t see us trading price for growth there.

About storage. We feel like that business is growing with the market. It’s shrinking with the market. That is not what we’d like to see, obviously. We’re working on it. We’ve added commercial resources over the the last 18 months. We feel positioned to out perform the market.

Question from Keith Bachmann at BMO: How might the M&A strategy differ if the go-private transaction happens? Also about employee retention during the transaction.

Rob Williams: No answer to the first question.

Gladden: Attrition has been about normal for us.

Another question: Does the PC market get softer or better over the next four to six quarters?

Gladden: There are multiple dynamics playing out. There’s a lot driving a refresh cycle. We see improvements in corporate and SMB segments. But we see consumer and government, not so good. Windows 8 has not been the catalyst to growth that we hoped it would be. (That’s a big admission.) You look at recent external data, and we would expect to see over the next few quarters declines in PC demand. We’re trying to run the business based on that.

2:22 pm: Can you update us on the peformance of Quest in the quarter?

Gladden: It’s progressing as expected. We expect it to be accretive in the first fiscal quarter of next year. (Or a year from now.)

Question from Bill Shope of Goldman Sachs, about the PC pricing reductions: Which accounts are the ones that get the discounts? Where do you draw the line on profit vs. market share?

Gladden: We know where long-term strategic accounts are. In many cases those are accounts we’ve had before and have walked away from. I think we’ve been selective. There are clearly some unit volume opportunities where we can sell a lot of units, but they don’t create any profit benefits.

2:29 pm: One last question, this one on support and deployment revenue, which was up.

Tom Sweet: We’re happy with the attach rate there. The team has seen some good things with support products. We’ve been able to keep the attach rate relatively high. Despite downward pressure, it will be a good business.

Gladden: We think that’s a good business on the enterprise side, too.

And that ends the call. Thanks for tuning in!

Earnings on a per-share basis were 21 cents on sales of $14.07 billion. That’s versus a pre-leak consensus of 35 cents on sales of $13.5 billion. Sales were obviously better than expected, but profits were substantially lower.

On a year-over-year basis, sales fell 2 percent. Profits on a non-GAAP basis fell 51 percent. The fall was led by end-user-computing, Dell’s mainstream PC business. Sales there fell 9 percent, and the unit’s operating margin fell 65 percent. That’s where the pain point is.

Enterprise sales grew by about 10 percent to $3.1 billion. Services revenue grew to about 2 percent. Software sales were $295 million but that unit ran at an operating loss.

Here’s Dell’s original announcement:

Dell Reports Fiscal Year 2014 First Quarter Financial Results

Revenue of $14.1 billion
Enterprise Solutions, Services and Software revenue up 12 percent
GAAP earnings of $0.07 per share; non-GAAP earnings of $0.21 per share

ROUND ROCK, Texas–(BUSINESS WIRE)–

Dell today announced fiscal 2014 first quarter results, with revenue of $14.1 billion, as the company grew revenue from Enterprise Solutions, Services and Software 12 percent year over year to $5.5 billion, or 8 percent growth, excluding the acquisition of Quest Software. Pricing adjustments that affected gross margins and continued acquisition-related costs in the quarter resulted in GAAP earnings of $0.07 per share and non-GAAP earnings of $0.21 per share.

“We made progress in building our enterprise solutions capabilities in the first quarter and are confident in our strategy to be the leading provider of end-to-end scalable solutions,” said Brian Gladden, Dell chief financial officer. “In addition, we have taken actions to improve our competitive position in key areas of the business, especially in end-user computing, and it has affected profitability. We’ll also continue to make important investments to support our strategy and drive long-term profitability.”

Results

Revenue in the quarter was $14.1 billion, a 2 percent decrease from the previous year.

GAAP operating income for the quarter was $226 million, or 1.6 percent of revenue. Non-GAAP operating income was $590 million, or 4.2 percent of revenue.

GAAP earnings per share in the quarter was 7 cents, down 81 percent from the previous year; non-GAAP EPS was 21 cents, down 51 percent.

Cash used in operations in the quarter was $39 million. On a trailing, 12-month basis, Dell has generated $3.4 billion in cash flow. Dell ended the quarter with $13.2 billion in cash and investments.

 
Information about Dell’s use of non-GAAP financial information is provided under “Non-GAAP Financial Measures” below. Non-GAAP financial information excludes amortization of purchased intangibles, severance and facility-actions, acquisition-related charges, costs incurred in Fiscal 2014 related to Dell’s proposed merger, and other items. All comparisons in this press release are year over year unless otherwise noted.

Operating Segments Summary:
As previously announced, Dell has realigned its global operating segments to its end-to-end solutions portfolio in the Enterprise Solutions Group, Dell Services, Dell Software Group, and End User Computing Group.

Enterprise Solutions Group revenue was $3.1 billion, a 10 percent increase. Operating income for the quarter was $136 million, a 71 percent increase. Dell server and networking revenue increased 16 percent as the company gained share in the calendar first quarter. Dell networking continued to deliver strong growth, with a 24 percent revenue increase, including a 46 percent growth in the company’s Force10 business. Dell storage revenue declined 10 percent.

Dell Services revenue grew 2 percent to $2.1 billion driven by an 11 percent increase in revenue for infrastructure, cloud and security services. Support and deployment revenue increased 2 percent and applications and business process services declined 15 percent. Operating income was $370 million, a 10 percent increase.

Dell Software revenue was $295 million, resulting in an operating loss. Dell enhanced its software capabilities during the quarter, investing in additional sales capability and research and development. Consistent with the company’s business strategy when it acquired Quest Software, this business is on track to be accretive to earnings in the first quarter of fiscal year 2015.

End User Computing revenue was $8.9 billion in the quarter, a 9 percent decrease. Operating income for the quarter was $224 million, a 65 percent decrease. Dell desktop and thin-client revenue declined 2 percent, mobility revenue declined 16 percent, and software from third parties and peripherals revenue declined 6 percent.

Company Outlook:
Given the company’s announcement on Feb. 5 of a definitive merger agreement to take Dell private, the company is not providing an outlook for the fiscal 2014 second quarter.

First off, Dell has moved up the date of its report. Originally set for May 21, the results will come after markets close in New York today and a conference call with analysts will start at 1:45 pm PT.

The reason for the change likely has a lot to do with the fact that Dell is probably going to report another miss on its consensus numbers. Analysts polled by Thomson Financial expect Dell to report a 35 cent per-share profit on sales of $13.5 billion. But as The Wall Street Journal reported Monday, Dell expects to announce profits of about 20 cents on $14 billion in sales, a huge bottom-line miss.

It’s difficult to expect much else. Despite all the efforts made in recent years to nudge Dell in the direction of becoming a more enterprise-focused company via acquisitions in the areas of cloud computing, software and services, Dell still derives about 70 percent of its sales, give or take, from consumer or commercial PCs or PC-related accessories like monitors. And as we all know, PC sales are plummeting at a historic rate.

That’s not to say there aren’t potential bright spots. CEO Michael Dell has been crowing about the company’s success in server sales and has described market share losses by rival Hewlett-Packard as “staggering.”

Then, of course, there’s the ongoing saga of Dell’s quest to go private in a $24.4 billion buyout transaction with Silver Lake Partners. Carl Icahn and Southeastern Management, which between them control about 13 percent of Dell shares, are opposed and this week made their own counter-offer, and then nominated a slate of directors to replace Dell’s current board. Icahn has made no secret that he’d like to send Michael Dell packing. The special committee of Dell’s board overseeing the buyout process has asked the Icahn camp for more information.

Certainly there will be questions for management about all of it, though the answers from Dell management will probably be some variation of “no comment.”

By 7:30 pm ET, Cisco shares had risen to $23.06, having closed at $21.21 during the regular session. Its results, reported earlier today, were only slightly ahead of the consensus view, but as with so many things today, slightly good is good enough.

The better news is that Cisco has historically been a pretty good barometer on the state of the tech economy generally. What it sees in its results, good or bad, is what other companies usually see within a couple of quarters.

“Slow and steady growth” was the phrase of the day. Sales grew by slightly more than 5 percent, but several segments grew faster. Service revenue grew by more than 7 percent year on year, while sales of products grew 5 percent.

Products sold into data centers, mainly servers in Cisco’s UCS line, grew by a healthy 77 percent, but accounted for only $515 million, or slightly more than 4 percent of sales. Wireless sales grew by 27 percent, but at $523 million weren’t much bigger as a percentage of revenue.

Service provider video grew 30 percent, accounting for nearly $1.3 billion in sales. And at least part of that growth can be attributed to NDS, the Israeli software company for which Cisco paid $5 billion last year.

In switching, Cisco’s biggest business segment, sales were $3.4 billion, down 2 percent year on year, but when you compare that to the results of other networking companies like Juniper, Riverbed and F5 Networks that have been reporting more difficult quarters in recent weeks and months, a drop of 2 percent isn’t so bad.

I just got off the phone with Cisco CEO — and D: All Things Digital speaker — John Chambers. A quick summary of our conversation is below:

AllThingsD: John, it felt like a fairly positive quarter in a tough environment. What’s really going on?

Chambers: I’d break it into four pieces. First, it was our ninth consecutive quarter with record revenue. And it was the sixth where earnings grew faster than revenue. That’s a pretty good indicator that we’re growing well in a tough environment. Secondly, we’ve moved from being the No. 1 communications company to having a shot at being the No. 1 IT company at the moment when those two things will actually combine. … It’s that transition that we now have in front of us that’s kind of exciting. It also says that we’re in the right technologies: Cloud, data center, mobility, video. We’re also the thought leader on the Internet of everything, which will be the next major transition for the enterprise and service providers. The fourth one was the geographic breakdown. I don’t think anyone saw as strong a set of numbers in the U.S. as we did, and it was across all market segments. Public sector grew 5 percent, enterprise grew 10 percent, commercial grew 13 percent, service providers grew 10 percent. It means that our relevance is changing. It also means that, barring a surprise, the U.S. economy is going to continue to recover at this pace. And it has to for the rest of the world to come out of all this.

Let’s talk about IT. If you’re becoming more of a general IT player, if you see yourself shaking up that business, then who do you see yourself taking business away from?

In the data center, it’s clearly the IBMs, the Hewlett-Packards and the Dells of the world. In the wireless space, it’s often the startups or some of the traditional players. It wasn’t so long ago that startups like Aruba were awfully tough on us. In the data center with software and hardware and silicon coming together, there’s the people who think it’s going to be a software-only world [like Big Switch --Ed.]. We think it’s an architectural play that we’re going to win on. So our competitors are different in every category, but that’s what you want. If the customers are going to buy an architecture that solves a business problem and you’re the only major supplier that crosses the service provider and the enterprise and commercial segments, and you go from the cloud and hybrid clouds to the data centers, and reach any device and you’re agnostic about whatever device it is, that is a strong position to be in.

And still one of your biggest segments, switching, was down slightly. What’s going on there?

It has been a tough environment there. As you know, our industry peers have had terrible year-to-date numbers on their stocks. When I look at the F5s and Junipers and Riverbeds of the world, you’re seeing them surprising the market and declines in their share prices. Same thing with the IT players. We’re one of the few players that hit and exceed expectations in that category. So it speaks to our relevance changing. If you’re selling standalone products, the market gets really tough. And speaking of our competitors, a lot of them said they never saw us coming. We’re pretty good at flying under the radar at first and then blowing right by, and then being tough. We’re really tough to beat.

It’s at this point that I pick a song that I think best portrays Cisco’s results. It has become a little tradition that I began when Cisco started to turn around after another sequence of disappointing quarters, and when we talk, Chambers always asks about it.

With the phrase “slow and steady” appearing so much in Chambers’ comments, and with the quarter’s results generally feeling upbeat, I thought the muscular 1971 Aretha Franklin classic “Rock Steady” fit the bill. Here it is.

Earnings on a per-share basis were 51 cents on sales of $12.2 billion. Both numbers beat the consensus of Wall Street analysts, who had expected earnings of 49 cents on sales of $12.18 billion.

Gross margins were 63 percent, which is about flat from the year-ago quarter. Sales in the Americas grew the most and were flat or slightly down in EMEA and Asia. Chambers said on the conference call with analysts, which is just getting under way, that sales in emerging countries showed “double digit” growth on a percentage basis.

Overall sales grew 5 percent. Here’s a snapshot from Cisco’s presentation slides, showing sales in various segments. As you can see, the data center business continues to grow like crazy, but it’s still a relatively small segment within Cisco. Service provider video grew nicely as well, as did the wireless segment. Switching, a key segment, was down. Chambers said that was because of weaknesses in Europe and in public sector spending generally.

CFO Frank Calderoni said the company expects fourth-quarter sales to grow year on year in the range of 4 percent to 7 percent, which works out to about $12.2 billion to $12.5 billion in sales, which is more or less in line with what the Street expects. He said gross margins will be 61 percent to 62 percent. He said he sees per-share earnings to come in between 50 cents and 52 cents versus a consensus view of 51 cents.

Cisco shares are rising in after-hours trading. They’re at $22.04, up nearly 4 percent, having closed at $21.21 during the regular session.

Here’s Cisco’s original announcement.

Cisco Reports Third Quarter Earnings
SAN JOSE, CA — May 15, 2013 – Cisco (NASDAQ: CSCO)

Q3 Net Sales: $12.2 billion (increase of 5% year over year)
Q3 Earnings per Share: $0.46 GAAP; $0.51 non-GAAP

Cisco, the worldwide leader in networking that transforms how people connect, communicate and collaborate, today reported its third quarter results for the period ended April 27, 2013. Cisco reported third quarter net sales of $12.2 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.5 billion or $0.46 per share, and non-GAAP net income of $2.7 billion or $0.51 per share.

“Cisco is executing at a very high level in a slow, but steady economic environment. We are especially pleased with our ninth consecutive record revenue quarter. We are starting to see some good signs in the US and other parts of the world which are encouraging,” stated Cisco Chairman and CEO John Chambers. “We have the right products, the right solutions and our customers are coming to us to solve their biggest business problems. The pace of change is increasing and Cisco is well positioned.”

Chambers continued, “We have always believed that the Internet will revolutionize the way we work, live, play, and learn. This has never been truer than it is today, with cloud, mobility and video all coming together to deliver the Internet of Everything and unprecedented new opportunities for businesses and consumers. We’re excited about the future.”

GAAP Results

Q3 2013 Q3 2012 Vs. Q3 2012
Net Sales $ 12.2 billion $ 11.6 billion 5.4 %
Net Income $ 2.5 billion $ 2.2 billion 14.5 %
Earnings per Share $ 0.46 $ 0.40 15.0 %

Non-GAAP Results

Q3 2013 Q3 2012 Vs. Q3 2012
Net Income $ 2.7 billion $ 2.6 billion 4.7 %
Earnings per Share $ 0.51 $ 0.48 6.3 %

Net sales for the first nine months of fiscal 2013 were $36.2 billion, compared with $34.4 billion for the first nine months of fiscal 2012. Net income for the first nine months of fiscal 2013, on a GAAP basis, was $7.7 billion or $1.44 per share, compared with $6.1 billion or $1.13 per share for the first nine months of fiscal 2012. Non-GAAP net income for the first nine months of fiscal 2013 was $8.0 billion or $1.50 per share, compared with $7.5 billion or $1.38 per share for the first nine months of fiscal 2012.

A reconciliation between net income on a GAAP basis and non-GAAP net income is provided in the table on page 6.

Cisco will discuss third quarter results and business outlook on a conference call and webcast at 1:30 p.m. Pacific Time today. Call information and related charts are available at http://investor.cisco.com.

Cash and Cash Equivalents and Investments

Cash flows from operations were $3.1 billion for the third quarter of fiscal 2013, compared with $3.3 billion for the second quarter of fiscal 2013, and compared with $3.0 billion for the third quarter of fiscal 2012.

Cash and cash equivalents and investments were $47.4 billion at the end of the third quarter of fiscal 2013, compared with $46.4 billion at the end of the second quarter of fiscal 2013, and compared with $48.7 billion at the end of fiscal 2012.

Dividends and Stock Repurchase Program

During the third quarter of fiscal 2013:

The combination of cash used for dividends and common stock repurchases under the stock repurchase program totaled approximately $1.8 billion.

Cisco paid a cash dividend of $0.17 per common share, or $905 million.

Cisco repurchased approximately 41 million shares of common stock under the stock repurchase program at an average price of $20.85 per share for an aggregate purchase price of $860 million. As of April 27, 2013, Cisco had repurchased and retired 3.8 billion shares of Cisco common stock at an average price of $20.35 per share for an aggregate purchase price of approximately $77.7 billion since the inception of the stock repurchase program. The remaining authorized amount for stock repurchases under this program is approximately $4.3 billion with no termination date.

“We executed as we said we would, achieving our revenue and profitability objectives,” stated Frank Calderoni, executive vice president and chief financial officer. “We are moving the business forward by executing on our strategy of driving long-term value to our shareholders.”

Select Global Business Highlights

Cisco completed the acquisition of privately held Intucell, Ltd., a provider of advanced self-optimizing network (SON) software solutions that enable mobile carriers to plan, configure, manage, optimize, and heal cellular networks automatically, according to changing network demands.
Cisco announced and completed the acquisition of Cognitive Security, a privately-held company headquartered in Prague, Czech Republic. Cognitive Security’s solution integrates a range of sophisticated software technologies to identify and analyze key IT security threats through advanced behavioral analysis of real-time data.
Cisco announced its intent to acquire SolveDirect, a privately held company headquartered in Vienna, Austria that provides innovative, cloud-delivered services management integration software and services.
Cisco announced its intent to acquire privately held Ubiquisys, a leading provider of intelligent 3G and long-term evolution (LTE) small-cell technologies that provide seamless connectivity across mobile heterogeneous networks for service providers.

Cisco Innovation

Cisco unveiled its new IP Interoperability and Collaboration System (IPICS) solution, a new set of multivendor, interoperable communications capabilities for operations and dispatch centers across government and enterprise industries.
Cisco announced its Cisco Integrated Services Router with Application Experience (ISR-AX), which converges routing, security technologies and a comprehensive suite of application-level services into a single-box solution designed to deliver the essential services needed at branch offices.
Cisco introduced its next-generation 100 Gigabit CMOS-based transceiver, Cisco CPAK™, the industry’s most compact and power-efficient 100 Gps transceiver technology, designed to reduce space and power requirements by more than 70 percent compared with alternative transceiver form factors, such as CFP.
Cisco introduced product innovations for data center and cloud environments including the following: highest-density 40-gigabit Layer 2/3 fixed switch; simplest hybrid cloud solution; and expansion of the Cisco® Open Network Environment with the most extensible controller.
Cisco announced new Cisco Unified Access™ solutions that simplify network design by converging wired and wireless networks.

Select Customer Announcements

Vodafone Netherlands, the second largest telecom service provider in the Netherlands, deployed the Broadband Network Gateway (BNG) Service Manager — enabling it to increase scalability and service velocity for its enterprise customers.
Cisco announced that MetroPCS Communications began a commercial launch of its Cisco Carrier-Grade Internet Protocol Version 6 Solution as a first step in the transition of its mobile Internet network to Internet Protocol version 6 (IPv6).
Cisco announced that GET, a leading cable operator in Norway, selected the Cisco Videoscape™ Unity video services delivery platform to transform its TV service and enable the deployment of next-generation entertainment experiences, including personalized and synchronized TV across multiple devices.
Cisco announced that SFR, a leading mobile telecommunications provider in France, selected Cisco to expand and enhance its mobile Internet network in order to accelerate the deployment of advanced 4G LTE services to its customers.
Cisco announced that Turkcell, the leading communications and technology company in Turkey with more than 35 million subscribers, has deployed the Cisco ASR 5000 Series as the foundation for its advanced mobile Internet network.

Analysts are expecting per-share earnings of 49 cents on sales of $12.2 billion. They’re also expecting Cisco to guide to 51 cents on $12.5 billion in the current quarter.

In a note to clients Monday, UBS analyst Amit Passi reiterated a “buy” rating, saying that checks with CIOs and resellers showed that Cisco might hang in there. “We think Cisco can meet or exceed consensus earnings estimates driven by improving business mix and efficiencies on the cost side,” he wrote. “Cisco’s diversified portfolio across end markets, customer types, and technologies should allow it to better weather the current storm of weak customer spending than some of its competitors.”

Even so, he’s cautious on the quarter ending in July. “We remain somewhat cautious heading into earnings this quarter in light of weaker spending trends across enterprise software, telecommunications and government customers, and recent negative data points in wireless [networks] during the month of April.”

Dell is expected to report revenue of roughly $14 billion, and earnings, excluding some expenses, of 20 cents a share for the company’s just ended fiscal first quarter, according to the person briefed on the financial results.

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Sharp said Tuesday that Executive Vice President Kozo Takahashi, 58, will replace current President Takashi Okuda, who led the company during a tumultuous year in which it scrambled to secure capital and warned about its future.

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A wide range of companies — from Cisco rival Juniper Networks Inc. to tech juggernaut International Business Machines Corp. — have caught investors off guard in recent weeks as corporate belt-tightening saps their growth.

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The red ink for the year ended March 31 brings the company’s losses for the past two bruising business years to about $15 billion. Like its Japanese rivals, Panasonic is reeling from a consumer electronics industry in rapid decline.

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For the current quarter, the company forecast revenue of $975 million, plus or minus 2 percent, implying a range of between $955.5 million and $994.5 million. Analysts polled by Thomson Reuters most recently expected $1.01 billion.

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The quarterly profit, reversing a massive loss from a year earlier, propelled the slumping Japanese electronics maker to its first annual profit in five years.

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Bobby Kotick, Activision’s chief executive, said that while the videogame maker started the fiscal year on a good note, “we now believe that the risks and uncertainties in the back half of 2013 are more challenging than our earlier view, especially in the holiday quarter.”

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After market close on Wednesday, the luxury electric automaker reported its first-ever profit: $11 million on revenue of $562 million. Excluding one-time items, adjusted quarterly earnings were $15 million, or 12 cents a share. Analysts had expected Tesla to post a profit of 4 cents a share on revenue of $500.2 million, according to a consensus estimate from Thomson Reuters.

The company said it built more than 5,000 Model S cars during the quarter, and recognized 4,900 of them as revenue — 400 more than expected. Better still, from the fourth quarter to the first, Tesla’s total gross margin rose from 8 percent to 17 percent. The company has projected that its gross margin will hit 25 percent by the end of the year. And, as of right now, it’s clearly on track to do so. (Caveat: The company’s margins do depend on emissions credits, which some observers worry might be fleeting.)

In a letter to Tesla shareholders, company founder Elon Musk, who’ll be appearing onstage at our 11th D: All Things Digital conference later this month, said he sees significant potential for the Tesla overseas.

“We are pleased with the strong global demand for Model S and are currently receiving orders at a rate greater than 20,000 per year worldwide,” he said. “Importantly, we are seeing orders in a particular region increase proportionate to the number of deliveries, which means that customers are selling other customers on the car. Given that we have not yet delivered any customer cars outside of North America, there would appear to be significant upside potential in Europe and Asia.”

Encouraging news. Tesla shares — which have been on a tear for a few months now, gaining about 67 percent this year — are spiking in after-hours trading. At $61.65, they’re up well over 10 percent as I write this.

Groupon said it had revenue of $601.4 million, up eight percent, in the first quarter, and earnings of three cents. Those profits were in line with Wall Street expectations, but sales were better than the expected $590 million at the daily deals site.

The stock was up nearly 12 percent in after-hours trading to $6.21. Shares have risen 42.6 percent in the last six months, although that’s down 43.9 percent from a year ago.

There was no news of the search for a new leader for Groupon, which fired its CEO, co-founder Andrew Mason, in the quarter.

On a conference call later, co-CEO Ted Leonsis said that Groupon’s board had formed a search committee, but that it was “not in a hurry” to find a new company head.

But, in a statement, co-CEO Eric Lefkofsky said: “We are encouraged by our results, as our local revenues accelerated and our margins improved over the prior quarter.”

Anything up is good news for the suffering Groupon, which has been pilloried by Wall Street since its late 2011 IPO, although sentiment has improved since Mason’s ouster.

Gross billings, which is the amount consumers buy from Groupon overall, without subtracting payments to merchants, were up four percent, to $1.04 billion, on strong growth in North America. Sales were off internationally, though, by 9 percent.

International business, which has a bigger active customer base than North America, was the cause of much of Groupon’s declines, a problem execs have been trying to address with a new “One Playbook” strategy to consolidate systems.

On the conference call, COO Kal Raman called the situation “a tale of two Groupons.”

On a GAAP basis, Groupon had a loss of one cent, from two cents in the same period a year ago.

Groupon also said North American transactions on mobile devices accounted for 45 percent of the overall number, up from 30 percent last year, while email fell to less than 45 percent of the deals sold.

On a less happy note, Groupon said that its outlook for the second quarter would be below consensus.

Here’s the the Chicago-based Groupon’s official press release, as well as some tasty financial slides, so you can read it all for yourself:

GRPN

GRPN_1Q13_Earnings_Slides