This must be why the Dow hit 13,000 yesterday. The rumor of a Greece default was past and that Hewlett-Packard (NYSE: HPQ) would beat their earnings estimate must have done it. It couldn’t possibly be the billions of dollars being funneled to the markets through permanently open central bank swap lines and POMO. No, that can’t be it.
Unlike GM, who made record profits on the miracle of lower sales and lower margins, HP made a lot less money on fewer sales. Net income fell 44% and sales dropped 7% in the first 1Q of FY2012. HP’s business is a mess being unable to compete in the rapidly growing tablet space while also being unable to supply the emerging markets hungry for PC’s that are good.
Net income was $0.73 per share or $.147 billion US, which compares unfavorably to the $1.17 they made in 2011. If one subtracts the one-time charges then it beat the clueless Wall St. analysts projections slightly. See there really is a tooth fairy.
Revenue was down to $30 billion off 7.1%. Their low-margin PC business continues to struggle as the market still is not convinced HP will not kill it off at some point in the future. Next quarter guidance targeted a range of $0.88 to $0.91 in earnings.
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