H-P, Fade to Black (HPQ, CSCO, IBM, DELL)

The biggest On a net basis, the final GAAP EPS was $0.91.  H-P is putting out some questionable guidance as it sees 3Q results of $0.87 to $0.89 net EPS, but adjusted earnings will be $1.05 to $1.07 EPS on revenues of $29.7B to $30.0B.  Thomson Reuters has estimates of $1.07 EPS and $29.72 billion in revenues.

For the year, HP sees $3.76 to $3.81 EPS net EPS on an 8% to 9% gain in revenues.  The prior estimate was $3,79 to $3.86 EPS.  On an adjusted earnings basis, HP is Raising guidance to $4.45 to $4.50 EPS vs. a prior target of $4.37 to $4.44 EPS.

In the last quarter, Cash Flow from operations was $3.1 billion and its inventory end was $6.4 billion.  Accounts receivable ended at $14.8 billion, down 5-days from a year ago.  In the quarter,m it spent $1.8 billion buying back shares and purchase 35 million shares in total.  Non-GAAP operating margin was 11%.

The breakdown was a s follows:

• Services revenues were $8.7B, UP 2%
• Enterprise Storage & Servers revenues were $4.5B, UP 31%
• Software revenues were $871M, DOWN 1%
• Personal Systems Group revenues were $10.0B, UP 21%
• Imaging & Printing Group revenues were $6.4B, UP 8%
• Financial Services revenues were $755M, UP 18%

ProCurve revenue increased 31%, and HP Networking overall increased 58% year-over-year including the impact of the 3Com acquisition.

H-P shares closed down 1.5% at $46.79.  Shares were soft on the report’s initial move by 2% but it now looks like H-P shares are up 2% in the after-hours session at $47.80.  Dell closed down 1.45% at $15.00 today, and its shares are now up 0.6% at $15.09 in the after-hours session.

JON C. OGG