Hewlett-Packard Cuts Full-Year Outlook, Anticipates 'Tough' Quarter

By Beecher Tuttle May 17, 2011

Hewlett-Packard shares fell by more than 4 percent in pre-market trading on Tuesday after the PC maker cut its full-year outlook and warned of a soft upcoming quarter.

The California-based company expects its full year sales to be between $129 billion to $130 billion with adjusted earnings of $5 per share, down from its February estimates of $5.20 to $5.28 per share and $130 billion to $131.5 billion in sales.

For the current quarter ending in July, H-P projects earnings of $1.08 per share on revenue of $31.1 billion to $31.3 billion. Those numbers will easily miss Wall Street estimates of $1.23 per share and $31.78 billion in sales.

The projections come one day after H-P chief executive Leo Apotheker reportedly sent a memo to his staff warning them of “another tough quarter.” The leaked note, dated May 4, also explained that upper management needs to “watch every penny and minimize all hiring.”

Hewlett-Packard moved up its earnings report from Wednesday afternoon to Tuesday morning following the news of the memo, which spooked investors.

The weak outlook for the full fiscal year was due, in part, to soft PC sales and the aftereffects of the Japanese earthquake and the following tsunami, according to the Associated Press.

“They probably have to do some cost cutting,” Kulbinder Garcha, an analyst at Credit Suisse AG in New York, told Bloomberg News. “They’ll have to drive for further efficiency. Can they do that easily? No, it’ll probably take some time.”

 Ironically, the soft full-year outlook comes on the same day that H-P posted better-than-expected second quarter earnings of $1.24 a share on $31.6 billion in revenue. Bloomberg analysts anticipated earnings of $1.21 a share and sales of $31.5 billion for the quarter ending in April. The company posted a net profit of $2.3 billion, up from $2.2 billion a year ago.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.




Beecher Tuttle is a TechZone360 contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

SHARE THIS ARTICLE
Related Articles

Modern Moms Shaping Influence

By: Maurice Nagle    7/19/2018

Everyone knows Mom knows best. The internet is enabling a new era in sharing, and sparking a more enlightened, communal shopping experience. Mommy blo…

Read More

Why People Don't Update Their Computers

By: Special Guest    7/13/2018

When the WannaCry ransomware attacked companies all over the world in 2017, experts soon realized it was meant to be stopped by regular updating. Even…

Read More

More Intelligence About The New Intelligence

By: Rich Tehrani    7/9/2018

TMC recently announced the launch of three new artificial intelligence events under the banner of The New Intelligence. I recently spoke with TMC's Ex…

Read More

Technology, Innovation, and Compliance: How Businesses Approach the Digital Age

By: Special Guest    6/29/2018

Organizations must align internally to achieve effective innovation. Companies should consider creating cross-functional teams or, at a minimum, incre…

Read More

Contribute Your Brain Power to The New Intelligence

By: Paula Bernier    6/28/2018

The three events that are part of The New Intelligence are all about how businesses and service providers, and their customers, can benefit from artif…

Read More