HP Earnings In Line, Lowers Guidance Slightly

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UPDATE:Hewlett-Packard reported second quarter results that were in line with Wall Street forecasts, as sales fell some 5 per cent to $29.7 billion.

The company said it earned $2 billion, or $1.00 a share, during the three months ending in July, which followed guidance it set earlier this year for the period.

However, HP lowered the high end of its guidance for full-year earnings, down three cents to a range of $4.05 to $4.07 a share.

“HP is still in the early stages of a multi-year turnaround, and we’re making decent progress despite the headwinds,” said Chief Meg Whitman. “During the quarter we took important steps to focus on strategic priorities, manage costs, drive needed organizational change, and improve the balance sheet. We continue to deliver on what we say we will do.”

Software revenue improved 18 per cent during the third quarter, but the company’s personal systems group — which includes sales of notebook and desktop computers — saw revenue decline 10 per cent.

However those results mask the difficult quarter HP experienced, which include $10.8 billion in charges as it wrote down its recent acquisition of Electronic Data Systems.

The Palo Alto, Calif, based company also plans to cut more than 27,000 employees as it prunes costs and streamlines itself. Those layoffs will cost the company at least $1.5 billion in severance pay.

Shares spiked following the announcement, but are now trading lower.

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