HP Inc. Gives Weak Earnings Forecasts

   By Josh Beckerman 
 

HP Inc., fresh off its split in early November, gave profit outlooks below Wall Street's expectations for its first quarter as a public company, sending shares lower.

The company's stock declined 5.1% after hours to $13.90.

Hewlett-Packard Co. on Nov. 1 split into two companies-HP Inc., which took the personal computer and printer business, and Hewlett Packard Enterprise, which is a business computer and software vendor. Before its legal split, the company divided itself operationally on Aug. 1.

The companies reported results as a combined entity for the last time, while they gave forward-looking guidance as separate firms.

HP Inc. said it expects its first-quarter adjusted earnings to range from 33 cents to 38 cents a share, below analysts' forecasts for 42 cents. Meanwhile, it pegged full-year adjusted earnings at $1.59 to $1.69, compared with analysts' views of $1.77.

Meanwhile, Hewlett Packard Enterprise said it expects adjusted profit of 37 cents to 41 cents a share, compared with analysts' views of 43 cents, and backed its full-year outlook of $1.85 to $1.95.

Hewlett Packard Enterprise shares rose 3% after hours.

As a combined company for the quarter ended Oct. 31, H-P said its revenue declined 9.5% to $25.71 billion, while profit edged lower to $1.32 billion from $1.33 billion. On a per-share basis, earnings were 73 cents, compared with 71 cents a year earlier.

Personal systems revenue and printing revenue both posted 14% declines.

The combined H-P struggled during the past four years, reporting a revenue decline in 15 of the past 16 quarters, hurt by a weak PC market. The company announced its separation plan in October 2014, citing the need to stay nimble to keep up with rapidly changing technology.

In September, the combined firm said HP Enterprise would lay off as many as 30,000 employees in an effort to drop low-margin services business and focus on more profitable areas like security. H-P said HP Inc. would lay off 3,300 and target new areas such as 3-D printing and A3 copiers.

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November 24, 2015 17:02 ET (22:02 GMT)

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