H-P Earnings Released Early; Fumbles Sideshow News & Guidance (HPQ, DELL, AAPL, IBM, GOOG)

Hewlett-Packard Co. (NYSE: HPQ) was having what is considered to be a strange day by any stretch of the imagination.  The stock was higher on reports that it was going to spin-off its PC unit and then lower on word that it was ready to spend $10 billion on Autonomy (AUTNY).

The company’s stock was halted for earnings and now its earnings release is out.  Before going into the report, H-P did confirm that it is in talks with Autonomy.  It is also confirming that it is exploring alternatives for its personal systems group (the PC and peripheral unit).  The company is discontinuing operations for its WebOS devices (Palm), specifically for its TouchPad and WebOS phones.  It is exploring options to “optimize” its WebOS software value going forward.

H-P earnings are $1.10 EPS on an adjusted basis and revenues were $31.2 billion. Thomson Reuters had estimates of $1.09 EPS and $31.19 billion in sales.  The guidance for next quarter is sort of redundant because it is also the year-end  Guidance for the year is being put at $4.82 to $4.86 EPS on sales of $127.2 to $127.6 billion against estimates of $5.01 EPS and $129.15 billion.

So, here is what HP is telling you.  The screwed the pooch on Palm.  It lost the smart phone war to Apple Inc. (NASDAQ: AAPL) and to Google Inc. (NASDAQ: GOOG).  H-P wants to look more and more like International Business Machines (NYSE: IBM).  It does not even want to compete with Apple Inc. (NASDAQ: AAPL) on the personal computing arena any longer.  This sounds more and more like a Leo Apotheker admission, “Well, if you aren’t Apple you aren’t S%$#!”

H-P has just reopened for trading and the stock is down over 7% at $29.15.

The company still trades at less than 7-times earnings.  Value stock?  More like a value trap.

JON C. OGG