Hewlett-Packard’s Narrow Miss Isn’t Impressing Investors
Hewlett-Packard (NYSE:HPQ) closed the day down 1.7 percent at $25.40 on Wednesday, and fell as much as 3 percent further in post-market trading after reporting mixed fiscal third-quarter results. GAAP net revenue fell 8 percent on the year to $27.2 billion, just shy of the average analyst estimate of $27.29 billion. Adjusted earnings fell 14 percent to 86 cents per share, in line with expectations. GAAP earnings were 71 cents per share.
An 80 basis-point decline in operating margin, from 9.2 to 8.4 percent, contributed to the negative sentiment coming out of the report. Cash flow from operations declined 6 percent on the year to $2.7 billion, while adjusted net earnings declined 15 percent to $1.7 billion.
“We once again achieved the financial performance we said we would, delivering $0.86 in non-GAAP diluted earnings per share, within our previously provided outlook of $0.84 to $0.87,” commented president and CEO Meg Whitman. “I remain confident that we are making progress in our turnaround. We are already seeing significant improvement in our operations, we are successfully rebuilding our balance sheet, our cost structure is more closely aligned with our revenue and we have reignited innovation at HP, with a focus on the customer.”