This story has been updated with conference call comments from HP CEO Léo Apotheker and CFO Cathie Lesjak.
PALO ALTO, Calif. ( TheStreet) -- Though sales of servers, storage and networking gear boosted HP's (HPQ) profit above what Wall Street was expecting for its first-quarter results, shares of the No. 1 PC maker were tanking in the after-hours session Tuesday because of weak guidance.
HP brought in revenue of $32.3 billion, up from $31.2 in the same period last year but just below analyst estimates of $32.95 billion. Excluding items, HP earned $1.36 a share, compared to $1.07 a share in the prior year's quarter. Analysts surveyed by Thomson Reuters were looking for earnings of $1.29 a share.
|HP, led by CEO Leo Apotheker, has reported its first-quarter results.|
HP shares, however, were dropping more than 12% to $42.39 in extended trading. HP said that it expects revenue between $31.4 billion and $31.6 billion, compared to analysts' forecast of $32.59 billion. Excluding items, HP expects earnings between $1.19 a share and $1.21 a share, compared to Wall Street's forecast of $1.25 a share.Speaking during a conference call with journalists after market close, HP executives noted ongoing weakness in the consumer PC market. "We continue to remain cautious about the consumer spending environment, especially for PCs," said Cathie Lesjak, the HP CFO, in response to a journalist's question. HP is also working to improve its short-term services signings, according to Lesjak, who said that that the company's services business has lagged behind its traditional seasonal performance. "We have isolated areas that we want to improve," said HP CEO Léo Apotheker. "I am convinced that we have the core strength to deliver - I am confident in our future." The tech bellwether grew its gross margin by 1.5 percentage points year-over-year to 24.4% during the first quarter, which Apotheker cited as a major positive. "
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV