Hewlett Packard Earnings: Here’s Why Investors Are Buying the Stock

S&P 500 (NYSE:SPY) component Hewlett Packard Co. (NYSE:HPQ) reported its results for the second quarter. Hewlett-Packard provides products, technologies, software and services to individual consumers, businesses and large enterprises, including customers in the government.

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Hewlett Packard Co. Earnings Cheat Sheet

Results: Net income for the computers fell to $1.59 billion (80 cents per share) vs. $2.3 billion ($1.05 per share) a year earlier. This is a decline of 30.9% from the year-earlier quarter.

Revenue: Fell 3% to $30.69 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Hewlett Packard Co. reported adjusted net income of 98 cents per share. By that measure, the company beat the mean estimate of 91 cents per share. It beat the average revenue estimate of $29.92 billion.

Quoting Management: “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.”

Key Stats:

The company’s net income has now fallen for three straight quarters. In the first quarter, net income fell 43.6% from the year earlier, while the figure fell 90.6% in the fourth quarter of the last fiscal year.

The company has now beaten analyst estimates for three quarters in a row. It beat the mark by 5 cents in the first quarter and by 4 cents in the fourth quarter of the last fiscal year.

Revenue has been on the decline for three quarters in a row. In the first quarter, revenue declined 7% to $30.04 billion while the figure fell 3.5% in the fourth quarter of the last fiscal year from the year earlier.

Looking Forward: 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 ninety days. At $4.01 per share, the average estimate for the fiscal year has fallen from $4.09 ninety days ago.

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

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