Computer and printer maker Hewlett-Packard Co. (HPQ) said Thursday after the markets closed that its third quarter profit fell 13% from last year, as revenue declined 8% amid a slump in the global PC market.
However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations, but its quarterly revenue fell short of analysts' forecast.
At the same time, the company gave a downbeat earnings forecast for the current quarter, and narrowed its fiscal year 2015 adjusted earnings outlook.
"HP delivered results in the third quarter that reflect very strong performance in our Enterprise Group and substantial progress in turning around Enterprise Services," said Meg Whitman, chairman, president and chief executive officer, HP. "I am very pleased that we have continued to deliver the results we said we would, while remaining on track to execute one of the largest and most complex separations ever undertaken."
HP shares are currently losing 1.13% in after hours trading after closing the day's regular trading session at $27.35, down 39 cents or 1.13%. The shares trade in a 52-week range of $27.21 to $41.10.
HP is preparing to separate itself into two industry-leading companies - Hewlett Packard Enterprise and HP Inc - on November 1. Hewlett Packard Enterprise will provide the technology solutions customers need to optimize their traditional IT, while HP Inc. will be a leading personal systems and printing company. Last week, HP unveiled the board structure of both the companies.
HP's Personal Systems revenue for the third quarter fell 13% to $7.5 billion. For the quarter, notebook unit sales were down 3% and desktop unit sales were down 20%. In August 2012, HP announced strategic alternatives for this business, but later decided to keep it following a review.
Market research firm Gartner, Inc. (IT) said last month that worldwide PC shipments fell 9.5% year-over to 68.4 million units in the second quarter of 2015, marking the steepest decline since the third quarter of 2013. China's Lenovo Group Ltd. maintained the top position in worldwide PC shipments in the second quarter with a 19.7% market share, followed by HP with a 17.4% market share.
HP's third quarter Printing revenue fell 9% from a year earlier to $5.1 billion. Revenue for the company's Enterprise Group rose 2% to $7.0 billion. Enterprise Services revenue for the quarter dropped 11% to $5.0 billion.
HP's software revenue for the quarter fell 6% to $900 million, while HP Financial Services revenue slipped 6% to $806 million.
For the third quarter ended July 31, 2015, the Palo, Alto, California-based company reported net income of $0.9 billion or $0.47 per share, compared to $1.0 billion or $0.52 per share for the year-ago quarter.
Excluding items, adjusted net income for the third quarter was $1.6 billion or $0.88 per share, compared to $1.7 billion or $0.89 per share in the prior year quarter.
On average, 26 analysts polled by Thomson Reuters expected the company to earn $0.85 per share for the third quarter. Analysts' estimates typically exclude special items.
Operating margin for the quarter narrowed to 4.8% from 5.3% a year earlier, while adjusted operating margin improved to 8.6% from 8.5% last year.
Net revenue for the third quarter fell 8% to $25.35 billion from $27.59 billion in the same quarter last year. Twenty-three analysts had a consensus revenue estimate of $25.44 billion for the third quarter.
Looking forward to the fourth quarter, the company forecasts earnings of $0.12 to $0.18 per share and adjusted earnings of $0.92 to $0.98 per share.
For the fiscal year 2015, the company now forecasts earnings of $1.87 to $1.93 per share and adjusted earnings of $3.59 to $3.65 per share. Previously, the company forecast earnings of $2.03 to $2.23 per share and adjusted earnings of $3.53 to $3.73 per share.
Analysts currently expect the company to earn $1.00 per share for the fourth quarter and $3.64 per share for the fiscal year 2015.
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