HP Shares Fall on Light Results; Plans to Cut up to 16,000 More Jobs
Computing giant Hewlett-Packard just reported results for its second fiscal quarter about 20 minutes earlier than scheduled, and the press release appears to be incomplete. They’re more or less in line with the consensus, though sales are slightly below expectations.
The company just said it expects to lay off more people. Job cuts announced in 2012, which was to top out at 34,000 jobs, will be increased by between 11,000 and 16,000 jobs. That will push the upper end of the range of jobs eliminated since Meg Whitman took over as CEO to an even 50,000.
HP’s profit on a per-share basis was 88 cents on revenue of $27.3 billion. Analysts polled by Thomson Reuters had projected a profit of 88 cents a share on revenue of $27.4 billion.
In a statement, Whitman said the turnaround effort she undertook when she stepped into the CEO role in 2011 “remains on track.”
Profits rose by one percent versus the same period a year ago. Sales were flat on a constant currency basis.
HP said it expects to earn between 86 cents and 90 cents a share in the third quarter versus a consensus of 89 cents. Operating cash flow from the quarter was $3 billion, and the company returned $1.1 billion to shareholders in the form of dividends and share buybacks.
HP shares slipped almost two percent after the results were released.
No comment yet from HP about the early release of the results, but the shares quickly fell. Here’s a look at its chart via Google Finance as it appeared with about 10 minutes left to go in the regular trading session.
Update: A full version of the release has been issued. David Faber of CNBC just reported that for some reason the first page of the release was sent out by mistake.
Here’s a few more numbers: Sales in the PC division, which HP calls the Personal Systems Group, rose seven percent year on year. Sales of consumer machines fell two percent and sales to businesses rose by 12 percent. Unit sales rose 10 percent, with notebooks and desktops both up by six percent.
Printing revenue fell four percent. Sales in the Enterprise Group revenue fell two percent though Industry Standard Servers revenue rose one percent. Storage sales fell six percent. The Business Critical Servers group, also known as the old Intel Itanium server line, continued its long-term decline and fell 14 percent. Networking sales fell six percent.
Enterprise Services, the troubled IT services unit, fell another seven percent. Revenue in the Software unit was flat.
HP exited the quarter with about $15.1 billion in cash and short-term investments. Whitman has signaled her interest in making a small- to medium-sized acquisition, but there’s no hints as to who a possible target might be yet.
HP shares finished the regular session down 78 cents or more than two percent to close at $31.78. The shares are up by about 13 percent since the start of the year. A conference call with analysts is expected to start in about 30 minutes.