Hewlett-Packard reported its fiscal 2011 first quarter performance Tuesday (2/22) after market close. This was newly appointed CEO Leo Apotheker’s first full quarter with the company, which reported a 4% rise in net revenue and 26% improvement in GAAP diluted EPS to $1.17. These results missed consensus estimates of $1.25 EPS and $32.62 billion in revenue, according to FactSet Research as reported by MarketWatch. Additionally, the company’s guidance for fiscal 2011 came in slightly below consensus, leading to a 12.09% drop in the company’s stock price in after hours trading to $42.40. The New York Times reports:
The forecast raised concerns because H.P. has spent heavily in recent years on acquisitions that were expected to propel substantial growth in areas that its rival I.B.M. has found highly lucrative, especially selling technical services to corporations.
The latest numbers show that H.P. is benefiting from the changes in its business model — just not as much as some investors would like.
Some interesting recent articles on HPQ:
- Hewlett-Package: Buy, Sell, or Hold? (Monty Spivak, SeekingAlpha.com, 2/16/2011)
- Shorts Circling HP’s Sinking Raft (Midnight Trader, SeekingAlpha.com, 2/23/2011)
Covestor model portfolios that hold HPQ as of 2/22 (click through for more info on the models):
- Large Cap from Gator Capital
- Suncoast Equity
- Domestic Dividend from Harvest Financial Partners
Sources:
“Hewlett-Packard First Quarter Results” 2/22/2011 http://h30261.www3.hp.com/phoenix.zhtml?c=71087&p=irol-newsArticle&ID=1531457&highlight=&mtxs=rss-corp-news
“H-P earnings surge, but forecast disappoints” Benjamin Pimentel, MarketWatch 2/22/2011 https://www.marketwatch.com/story/h-p-net-jumps-16-shares-fall-on-weak-forecast-2011-02-22
“H.P. Earnings Rise, but Sales Miss Forecasts” Associated Press, New York Times 2/22/2011 https://www.nytimes.com/2011/02/23/technology/23hewlett.html
