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Hewlett-Packard reports higher Q3 earnings

NEW YORK--Hewlett-Packard Co. reported an increase in its third-quarter net income on Thursday, but the technology company gave a lower-than-expected outlook for the current quarter and cut its outlook for the year for the second time.

While its commercial businesses remained healthy, HP said quarterly revenue in its customer-facing businesses fell 15 percent.

The results were overshadowed by HP's announcement that it plans to spin off its PC business and stop selling its webOS tablet and mobile phones. The world's largest maker of printers and personal computers has been working to transform itself into more of a technology services company, like its rival IBM.

HP's stock fell US$1.88, or 6 percent, to close at US$29.51. It fell another US$2.66, or 9 percent, to US$26.85 in extended trading. HP's announced its decision on the mobile products and its quarterly results about an hour before the market closed Thursday.

The company earned US$1.93 billion, or 93 U.S. cents per share, in the latest quarter. That's up 9 percent from US$1.77 billion, or 75 cents per share, a year earlier. Its adjusted earnings were US$1.10 per share, a penny above analyst expectations.

HP's revenue climbed less than 2 percent to US$31.2 billion from US$30.7 billion. This matched analysts' average expectations, according to FactSet.

HP said its software revenue rose 20 percent to US$780 million, and its services revenue climbed 4 percent to US$9.09 billion, while revenue in its printer segment fell 1 percent to US$6.09 billion and revenue in its personal systems group, which includes PCs, fell 3 percent to US$9.59 billion.

For the current quarter, HP forecast adjusted earnings of US$1.12 to US$1.16 per share, below analysts' average expectation for US$1.32 per share. The company expects revenue of US$32.1 billion to US$32.5 billion, shy of analysts' estimate of US$33.98 billion.

HP plans to record a one-time charge of US$1 billion in the fourth quarter related to the webOS business shutdown and other restructuring costs. It said may also book a charge related to the value of the webOS business but did not say how much that would be.

The company also lowered its full-year guidance slightly. It now expects revenue of US$127.2 billion to US$127.6 billion. In May, it forecast revenue of US$129 billion to US$130 billion, a slightly downward revision from its February outlook. Analysts are predicting US$129.12 billion in revenue.

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Comments

August 23, 2011 qikceltic@

Hewlett Packard has more downward distance to cover. They have accumulated enemies faster than any company in history including drawing the contempt of most of the citizens of the USA. I wouldn't touch this cold sore of a companies unsecured equity paper with a ten foot pole and a condom. All I can say for this bogus profit going up report is IT'S A TRAP!