This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

HP Drops on Weak Guidance

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 CEO Leo Apotheker
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. "[The] gross margin expansion allows us to invest for future growth," he said.

HP, which competes with IBM (IBM) and Dell (DELL), said that first-quarter revenue from its enterprise storage, servers and networking division grew 22% year-over-year.

--Written by James Rogers in New York.

>To follow the writer on Twitter, go to http://twitter.com/jamesjrogers.

>To submit a news tip, send an email to: tips@thestreet.com

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • 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 Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,113.54 +61.81 0.36%
S&P 500 1,983.53 +9.90 0.50%
NASDAQ 4,456.0160 +31.3120 0.71%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs