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H-P Escapes Dell's Executioner... But Its Workforce Doesn't
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Hewlett-Packard Company (NYSE: HPQ) is managing to escape the trap of Dell Inc. (NASDAQ: DELL) after earnings. Unfortunately, at least if you are a worker there, a decent portion of H-P’s rise after earnings may be tied to its announcement of a restructuring that is going to shed somewhere around 27,000 workers or about 8% of its workforce.
On an adjusted basis H-P turned in earnings of $0.98 EPS on total sales of $30.69 billion. This was above its prior guidance of $0.88 to $0.91 per share and above the consensus from Thomson Reuters of $0.91 EPS and $29.9 billion in revenues.
HP showed the following in PC and tech sales:
Results elsewhere are as follows:
HP spent $350 million of cash during the quarter to repurchase approximately 13 million shares of common stock in open market transactions and the company exited the quarter with $8.7 billion in gross cash.
Cutting another 8% of the workforce in the coming year or more is not going to come without pain. What is also helping is that the crummy news coming out of Dell caused Dell’s worst day in a decade or more and that set the bar very low for H-P. H-P closed down 3.2% at $21.08 against a prior 52-week low of $21.28, but shares are up 5.7% at $22.33 in the after-hours session.
Microsoft Corporation (NASDAQ: MSFT) is not winning with H-P perhaps on lower total unit sales. Shares closed down 2.2% at $29.11 and the stock is at $29.04 in the after-hours. Intel Corporation (NASDAQ: INTC) is facing the same after a 2.3% drop to $25.44 today and the after-hours session is down at $25.35.
JON C. OGG
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