Hewlett-Packard Posts Upbeat Q3 Profit, But Sales Drop

reported better-than-expected earnings for its fiscal third quarter, but the company's sales missed analysts' estimates. The Palo Alto, California-based company reported quarterly net income of $854 million, or $0.47 per share, compared to $985 million, or $0.52 per share, in the year-ago period. Excluding certain items, the company's earnings slipped to $0.88 per share from $0.89 per share. Its revenue dropped 8 percent year-over-year to $25.3 billion. However, analysts were expecting earnings of $0.85 per share on revenue of $25.44 billion. The average estimate among 52 Estimize users was for earnings of $0.85 per share and revenue of $25.54 billion. Personal Systems revenue declined 13 percent year over year, while Printing revenue slipped 9 percent in the latest quarter. Enterprise Group revenue rose 2 percent, while Enterprise Services revenue dipped 11 percent. Software revenue slipped 6 percent year over year, while HP Financial Services revenue fell 6 percent in the quarter. The company ended the quarter with $17.4 billion in gross cash. "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 expects Q4 adjusted earnings of $0.92 to $0.98 per share, versus analysts' estimates of $1 per share. For FY15, Hewlett-Packard now expects earnings of $3.59 to $3.65 per share, versus its prior forecast of $3.53 to $3.73 per share. Hewlett-Packard shares fell 0.73 percent to $27.15 in the after-hours trading session.