Hewlett-Packard Co. (NYSE: HPQ) has reported its third-quarter earnings. The PC and IT-services giant had adjusted earnings of $0.89 per share. Revenues grew 1% from a year ago on a constant currency basis to $27.6 billion. Hewlett-Packard had consensus earnings estimates from Thomson Reuters of $0.89 in earnings per share (EPS) and $27.01 billion in revenues.

HP’s non-GAAP operating margin rose to 8.5% in the quarter, up from 8.4% a year ago. The company’s GAAP operating margin fell to 5.3% from 6.8%, but that was based on charges that were already known to be coming.

Several other issues stood out here. Third-quarter cash flow from operations was up 36% to $3.6 billion. Inventory was down 1-day to $6.2 billion, and accounts receivable were also down 1-day to 46 days at $14.2 billion. HP spent $582 million of cash during the quarter to repurchase approximately 17.5 million shares of common stock, and the company ended the last quarter with $14.8 billion in gross cash.

HP is now targeting non-GAAP earnings to be in a range of $1.03 to $1.07 per share for the coming fourth quarter. Thomson Reuters has the consensus estimates for the coming quarter as $1.05 EPS and $28.62 billion in revenues, which would compare to the period in the prior year of $1.01 EPS and $29.13 billion in revenues.

Here was a brief breakdown by unit:

• Personal Systems revenue was up 12% year over year with a 4.0% operating margin.
• Printing revenue was down 4% year over year with an 18.4% operating margin.
• Enterprise Group revenue was up 2% year over year with a 14.0% operating margin.
• Enterprise Services revenue was down 6% year over year with a 4.1% operating margin.
• Software revenue was down 5% year over year with a 21.2% operating margin.
• HP Financial Services revenue was down 3%, with a 1% increase in net portfolio assets and a 14% increase in financing volume, delivering an operating margin of 9.2%.

READ ALSO: Warren Buffett’s 10 Most Dominant Stocks

CEO Meg Whitman said of the turnaround:

Overall, I’m very pleased with the progress we’ve made. When I look at the way the business is performing, the pipeline of innovation and the daily feedback that I receive from our customers and partners, my confidence in the turnaround grows stronger.

Hewlett-Packard shares closed 1% down at $35.12. HP’s stock has a 52-week range of $20.25 to $36.21. Its consensus analyst price target is $36.93, and the highest analyst price target was above $43 on last look.

HP shares were down another 1% at $34.77 in the after-hours trading reaction. Apparently investors would have wanted to see more about this turnaround. After all, shares have screamed higher in the turnaround process.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.