HP's 3Q Earnings Miss Wall Street Expectations

The company also said its current quarter would fall below expectations.
SAN JOSE, Calif. (AP) -- Computer and printer giant Hewlett Packard Co. reported a 9 percent jump in third-quarter revenues Thursday, but the results fell short of expectations in part because of what the company termed "unacceptable execution" by its server and storage business. HP also said its current quarter would fall below expectations.

The company said other divisions--including personal computers, software, services and printers--performed well, but those results were eclipsed by "management missteps" in the enterprise business.

"These solid results were overshadowed by unacceptable performance in enterprise systems and storage," said Carly Fiorina, HP's chief executive. "Here, execution issues cost us, and we are therefore making immediate management changes."

She did not immediately outline the personnel moves.

For the three months ended July 31, HP earned $586 million, or 19 cents per share. That's nearly double the $297 million, or 10 cents per share, in the same period last year. Excluding items, the said it earned 24 cents per share compared with 23 cents per share a year earlier.

Sales grew 9 percent to $18.9 billion in the third quarter.

Wall Street analysts were expecting earnings of 31 cents per share on sales of $19 billion, according to a survey by Thomson First Call.

HP also said per-share earnings in the current quarter will be between 35 cents and 39 cents. Sales are expected to be between $21 billion and $21.5 billion.

Analysts were expecting a per-share profit of 43 cents per share on sales of $21.3 billion.

The company said revenue in personal systems grew 19 percent year-over-year, and sales in imaging and printing rose 8 percent. The company's enterprise servers and storage posted a 5 percent revenue decline, but sales in HP services and software grew 12 percent and 17 percent, respectively.

The results were announced before the markets opened. Shares of HP closed at $19.52, down 43 cents, in Wednesday trading on the New York Stock Exchange.

Palo Alto-based HP was scheduled to report its results Aug. 18.

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