U.S. Markets closed

Hewlett Packard Second Quarter Earnings

Investopedia Staff

Hewlett Packard (NYSE: HPQ) announced its results for the second quarter on May 23, 2012. Hewlett-Packard provides products, technologies, software and services to individual consumers, businesses and large enterprises, including customers in the government.

Investors should care about a company's quarterly earnings because it shows the state of the business over the past 90 days and provides guidance for the following 90 days.

SEE: Can Earnings Guidance Accurately Predict The Future?

The Numbers:

Hewlett Packard's latest numbers were good, as the company announced EPS and revenues that came in ahead predictions. The company reported adjusted net income of 98 cents per share versus the 91 cents per share estimate and revenues of $30.69 billion versus the $29.92 billion estimate. Revenue fell 3% from the same period last year. Last quarter marks the third in a row in which the company has seen falling revenue on a year-over-year basis. Hewlett Packard's net income for the second quarter was $1.59 billion. According to the reported number, this is down 30.9% from last year's figures. Last quarter marks the third in a row in which the company's net income has fallen. Profits declined 43.6% in the first quarter and 90.6% in the fourth quarter of the last fiscal year.

Management Quote:

"We are making progress in our multi-year effort to make HP simpler, more efficient and better for customers, employees, and shareholders," said Meg Whitman, HP president and chief executive officer. "This quarter we exceeded our previously provided outlook and are executing against our strategy, but we still have a lot of work to do."

Looking Ahead:

Analysts appear increasingly negative about the company's results for the next quarter. The average estimate for the third quarter has moved down from $1.05 a share to $1.02 over the last 90 days. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. For the fiscal year, the average estimate has moved down from $4.09 a share to $4.01 over the last 90 days.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)