Hewlett-Packard (NYSE:HPQ) closed the regular session up 0.65 percent and climbed as much as 10 percent higher in post-market trading after reporting fiscal second-quarter earnings that beat expectations. Net revenue declined 10 percent on the year (9 percent after adjusting for currency) to $27.6 billion, beating the average estimate of $28.12 billion. Adjusted diluted earnings declined 11 percent on the year to $0.87 per share, beating the average analyst estimate of $0.81 as well as its own guidance for earnings in a range between $0.80 and $0.82 per share.
Positive highlights from the release include a 44 percent year-over-year increase in cash flow from operations to $3.6 billion. This follows a 115 percent year-over-year increase in cash flow in the previous quarter. GAAP operating margin did shrink 1.4 points on the year to 5.8 percent, but non-GAAP margins shrank just 0.3 points to 8.6 percent.
The news is positive but indicative of a company still struggling to return to positive growth. Hewlett-Packard has made no secret of how long its turnaround will take, and CEO Meg Whitman has largely brushed off criticism on the matter. “I am encouraged by our performance in the second quarter, and I feel good about the rest of the year,” said Whitman. “As I have said many times before, this is a multi-year journey. We have a long way to go, but we are on track to deliver on our fiscal 2013 non-GAAP diluted earnings per share outlook.”
Hewlett-Packard is expecting non-GAAP fiscal third-quarter earnings in a range between $0.84 and $0.87, which excludes expected after-tax costs of approximately $0.28 per share related “primarily to the amortization of purchased intangible assets, restructuring charges and acquisition-related charges.”
For the year, Hewlett-Packard is expecting non-GAAP earnings in a range between $3.50 and $3.60 per share, more than the $3.49 per share currently forecast by the analyst average. The company’s non-GAAP estimate excludes expected after-tax costs of approximate $1.00 per share, also related “primarily to the amortization of purchased intangible assets, restructuring charges, and acquisition-related charges.”
Don’t Miss: How Will Intel’s New CEO Shake Up the Company?