Hewlett-Packard Soars After Q3 Results; Lifts Full-Year Outlook

  on

Struggling diversified technology company Hewlett-Packard (NYSE: HPQ [FREE Stock Trend Analysis]) released its fiscal second-quarter earnings results after the closing bell on Wednesday.

Over the last five years, the company's share price has been more than halved as a secular decline in the PC business and a failure to innovate have weighed on sales and income.

Nevertheless, the stock has been rallying in recent months ahead of Wednesday's report. Prior to the company's second-quarter financial update, Hewlett-Packard shares had climbed nearly 50 percent in 2013.

In Q2, Hewlett-Packard reported earnings that came in well ahead of estimates, but sales that missed Wall Street expectations. In Wednesday's after-hours trading session, however, HPQ is soaring after lifting its full-year earnings guidance. At last check, the stock was up more than 13 percent to a new 52-week high of $24.05.

In its most recent quarter, Hewlett-Packard reported net income of $1.1 billion or $0.55 per share, which was a roughly 31 percent decrease from the $1.6 billion or $0.80 per share the company reported in the year ago period.

On an adjusted basis, which is comparable to analysts' consensus estimates, net income was down around 11 percent to $1.7 billion or $0.87 per share. In last year's second-quarter HPQ reported earnings per share of $0.98. Despite the decline in earnings, the results came in well ahead of Wall Street EPS estimates of $0.81.

Sales in the quarter fell 10 percent to $27.6 billion from $30.7 billion last year. This came up short of analysts' consensus revenue estimates of $28.12 billion. Falling revenue has become a trend at the iconic technology company and has been a persistent headwind for the stock price.

Looking ahead to Q3, Hewlett-Packard guided for earnings per share between $0.56 and $0.59. Adjusted EPS is expected to be between $0.84 and $0.87. This compares to current third-quarter Wall Street earnings per share estimates of $0.84.

For fiscal 2013, the company lifted its earnings per share guidance to a range of $2.50 to $2.60 from its previous outlook of $2.30 to $2.50 per share. Adjusted EPS is now expected to be between $3.50 to $3.60 versus previous guidance of $3.40 to $3.60. This is above current consensus of $3.49 and has caused the positive reaction in the share price in after-hours trading.

(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

 

Copyright Benzinga. All rights reserved.

Join the Discussion
Nintendo's Newest Kirby Game Is A Total Detour
Nintendo's Newest Kirby Game Is A Total Detour
Fitbit's First Activity Watch Falls Short
Fitbit's First Activity Watch Falls Short
Dying Light Is The Spiritual Successor To 'Dead Island'
Dying Light Is The Spiritual Successor To 'Dead Island'
The Last Mitsubishi Evolution
The Last Mitsubishi Evolution
The i8 Is Proof BMW Should Make More Mid-Engined Cars
The i8 Is Proof BMW Should Make More Mid-Engined Cars
QD Vision Shows Off Cheap 4K TVs
QD Vision Shows Off Cheap 4K TVs

More Video