HP releases quarterly earnings for the third fiscal term, share fall 6%

Hewlett-Packard (HP) recently announced its quarterly earnings to the public and the beleaguering income statement took a hit in the stock market immediately.  HPQ share price fell 6 percent in the early trading on Thursday.

Many experts are of the opinion that the loss-evident financial summary of the third fiscal quarter is a clear statement that the company is going through harsh times because of the restructuring of its corporate model.

The company announced during the third fiscal quarter that it will no longer be a printer-PC company; it is expanding its wing span to enterprise services in addition to PC business. From a bright side, HP is now simply divided into two main segments, PC/Printer and Enterprise solutions.

The shortfall in profitability also has its effects from the recent $8 Billion write-off of its Electronic Data Systems, a technology services company it acquired for $13.9 billion in 2008.

Despite all this haphazard profit-loss hoopla, the company announced a $1 profit per share that beat the estimated 98 cent profit by the analysts. However, it was still 9 percent down from year-ago quarter profit of $1.10.

Including the write-downs, HP posted a net loss of $4.49 a share vs. a profit of 93 cents in the year-ago quarter.

The company’s operating revenue fell 5 percent to $29.7 Billion compared to the year-earlier profit of $30.1 Billion. This is because of the harshly affected sales of PCs and printers. New tablets have hit deeply on PC market and unlike other companies, HP is yet to announce a promising mobile device. Its WebOS project has been scraped as well thrown into the open-source market.

HP CEO Meg Whitman said in a statement that the company is going through tough times because of restructuring and this prolong to a couple of years more.

However, Amit Daryanani, an analyst for RBC Capital Markets, showed his concerns over aggravating financial woes. “While we do expect margins and earnings per share to benefit from the $3 billion of restructuring savings in fiscal year 2013 it remains unclear to us how the company intends to stabilize its revenue line and how much those savings will be reinvested versus flowed to the bottom line,” he wrote.

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Posted by Usman Khalid on Aug 24 2012. Filed under Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.