HP Differs From Dell in Earnings (HPQ, DELL)

Hewlett Packard Co. (NYSE: HPQ) has just reported its first real quarter earnings report under the new CEO Leo Apotheker. The PC, server, and IT giant reported earnings of $1.36 adjusted EPS and $32.3 billion in revenues versus a Thomson Reuters consensus of $1.29 EPS and $32.95 billion in revenues.  This reaction to the report so far is looking rather different than that of Dell inc. (NASDAQ: DELL) after its earnings just a week ago.

For guidance, HP predicts $1.19 to $1.21 EPS and $31.4 to $31.6 billion in revenues for the current quarter and sees $5.20 to $5.28 EPS and $130 billion to $131.5 billion in revenues for this fiscal year-end of October-2011.  Thomson Reuters has estimates $1.25 EPS and $32.59 billion in revenues for the current quarter and $5.24 EPS and $132.95 billion in revenues for the full year. Some may call this a warning, some may just call it very unenthusiastic guidance.

As far as the business segments, these are as follows: Personal Systems Group revenue declined 1% year over year with a 6.4% operating margin; Imaging and Printing Group revenue grew 7% year over year with a 17.0% operating margin; Services revenue declined 2% year over year with a 16.0% operating margin; Enterprise Servers, Storage and Networking revenue grew 22% year over year with a 14.7% operating margin; Software revenue grew 5% year over year with a 17.6% operating margin; and Financial Services revenue grew 15% year over year with a 9.6% operating margin.

HP said growth was balanced in all regions in local currency, with accelerated growth in BRIC countries on momentum in the commercial sector while it saw uneven consumer performance across its geographies and product categories during the quarter.  First quarter revenue was up 6% in the Americas to $14.4 billion. Revenue was flat in Europe, the Middle East and Africa and up 7% in Asia Pacific to $12.1 billion and $5.8 billion, respectively.

HP shares closed down 0.90% at $48.23 on an unofficial closing bell versus a 52-week range of $37.32 to $54.75.  Shares are indicated lower down around $46.00 per shares in the after-hours session.

JON C. OGG