Earnings Cheat Sheet: Hewlett-Packard (HPQ)

Among the Hurd drama, the uncertainty for H-P’s leadership and a recent 15% decline for HP’s stock price, the real numbers proved two things, higher expenses hurt H-P’s bottom line, but top-line growth is still in tact for the 300,000 plus employee Palo Alto, CA-based computer company. Here’s the breakdown on Hewlett-Packard (HPQ):

Earnings: Q3 profits of $.75 vs. $1.08 consensus and a gain of $.69 in Q2 last year, an 8.6% rise in profits Year-over Year. Excluding items, H-P would have earned $1.08 per share, which was in-line with analyst expectations.

Revenue: Increased 11% Year-over-Year from 27.6 Billion last year t0 $30.7 Billion this year, versus $30.43 Billion consensus, passing expectations.

Cathie Lesjak, H-P CFO and interim CEO stated, “We raised our full-year outlook and are continuing to build momentum in driving out costs, investing for profitable growth and capitalizing on HP’s competitive advantages in the marketplace.”

Comment: Shares of HPQ are trading down slightly .64% following the company’s earnings release after-the-bell, trading at $40.50 per share, compared to the closing price of $40.76.

In the chart above, HPQ shares are trading at 52-week lows well below the 50-day and 200-day moving averages. Following the Hurd debacle, the stock has dropped 15+%. Most analysts have been pegging HPQ shares in the $45-48 range, above the current share price. A bright note in today’s solid HPQ earnings report was the evident growth in emerging markets. According to the company’s earnings report, “revenue from outside of the United States in the third quarter accounted for 63% of total HP revenue, with revenue in the BRIC countries (Brazil, Russia, India and China) increasing 21% while accounting for 11% of total HP revenue.” With a double-digit top-line growth number issued today amidst the negative press beating down Mark Hurd for his actions, buying opportunities are coming into play for investors who see the strength beyond the shadow in HPQ shares. The company is still rock solid. The only question remaining is who will be the next captain of the HPQ ship?

Disclosure: No positions held in the companies mentioned.