H-P beats analyst estimates, but earnings drop, while CEO says 27,000 employees will soon be out of work
I have to admit that the financial websites and newspapers that lead their stories with the word “analysts” are now forever to be ignored. An “analyst” is someone with a quarter that will tell you what you need to know, once they flip the damn thing.
So when the first word out of the Hewlett-Packard earnings conference call was “beat analyst estimates” I knew it would be a while before I got the real story. And here it is:
H-P reported Q2 earnings this afternoon, and they weren’t pretty, though they weren’t horrible, either: Revenue fell 2.8 percent to $30.7 billion, and income declined to $1.6 billion, from $2.3 billion a year ago.
“We exceeded out previously provided outlook and are executing against our strategy,” H-P CEO Meg Whitman said in the earnings statement. “We still have a lot of work to do.”
That work apparently involves cutting some 8 percent of the workforce, of 27,000 employees. Not surprisingly, Wall Street loves the job cuts as the H-P stock is climbing in after hours trading. (I have no words.)
The H-P news this afternoon came 24 hours after Dell forecast its Q2 earnings saying that revenue would be total between $14.7 billion and $15 billion. Dell’s Q2 does not end until July.
“In my own interactions with larger customers, we are seeing a delay and a pause in spending activity,” Michael Dell, the company’s chief exec said yesterday. The stock proceeded to get hammered.
Another tech/new media company that reported earnings this afternoon was Oakland-based Pandora. Pandora reported that it lost $20.2 million in its first quarter on revenue of $80.8 million.
The company beat analyst estimates, so, of course, the stock is rising.
But, in this case, I suppose there is some reason for optimism: Pandora’s revenue is growing rapidly, up 58 percent over last year, and it is growing both its paid subscriber base as well as its overall user base (now over 50 million).
“This quarter Pandora averaged more than 50 million active users a month who generated more than 3.09 billion listening hours across Pandora’s multiple platforms – desktop, auto, consumer electronics, and mobile devices,” Joe Kennedy, Chairman & CEO of Pandora said in their earnings statement.
The company is projecting that next years total revenue will be between $420 million and $427 million.