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HP posts 13% drop in Q3 profit, issues grim outlook before November split

HP posts 13% drop in Q3 profit, issues grim outlook before November split
The earnings report comes as HP plans to split itself into two separate companies on November 1.

Hewlett Packard (NYSE:HPQ) reported a 13% drop in third-quarter earnings and issued current-quarter forecasts below market expectations as the world’s second-largest PC seller continues to struggle amid technology shift toward mobile and cloud computing.

Shares fell as much as 2.9% to $26.54 in New York premarket on Friday. The stock had lost 32% since the beginning of the year through the close of regular trading on Thursday.

Net income fell to $854mln, or $0.47 per share, for the three months ended July 31, from $985mln, or $0.52 per share, a year earlier, the Palo Alto, California-based company said in a statement on Thursday.

Stripping out items, per-share earnings slid to $0.88 from $0.89. The company had guided for $0.83 to $0.87 per share, and analysts had predicted earnings of $0.85 per share.

Revenue decreased 8% to $25.3bn. The Wall Street consensus was for revenue of $25.44 bn.

Revenue at HP's personal computer and printer business fell 11.5%.

Revenue at HP's personal computer business declined 13%, with revenues from sales to consumers were down 22%.

HP's software revenue fell 6% to $900 million.

The earnings report comes as HP plans to split itself into two separate companies on November 1, one for its computer and printer business and one for its corporate hardware and services operations.

HP forecast fourth-quarter adjusted earnings per share in the range of $0.92 to $0.98. Analysts currently expect the company to earn $1.00 per share.

Hewlett-Packard narrowed its adjusted profit outlook for the full fiscal year, to $3.59 to $3.65 share, from the range of $3.53 to $3.73 indicated in May. Analysts currently have an average estimate of $3.64 per share.


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