Hewlett-Packard Misses Earnings Estimates

So much for words of reassurance. Hewlett-Packard(HWP Quote) posted fourth-quarter earnings of 41 cents a share, missing the 15-analyst estimate by 10 cents, but up from year-ago earnings of 36 cents a share. The missed earnings follow the company's announcement on September 22 that it would meet fourth-quarter earnings and revenue targets.

Hewlett-Packard also announced this morning that it ended discussions to acquire the consulting arm of PricewaterhouseCoopers. The bid had been seen as a move to bolster the services part of its business.

Hewlett-Packard, a computer and imaging giant, fell 6% when it initially announced in early September that it was seeking PricewaterhouseCoopers' consulting business. Then, on Halloween, H-P respected Chief Executive Carly Fiorina said the company was reconsidering the price and the purchase of the consulting unit.

In a press release, the company said: "We are pleased that revenue growth is accelerating, but very disappointed that we missed our EPS earnings per share growth target this quarter due to the confluence of a number of issues that we now understand and are urgently addressing."

Hewlett-Packard attributed its reduced profitability to margin pressures, adverse currency effects, higher-than-expected expenses and its business mix. The company did say that its business is "healthy," demand is strong and that it is not backing away from growth targets. H-P said it had strong revenue growth in computing systems, but there was an order backlog in software.

The earnings numbers for the fourth quarter excludes investment and divestiture gains and losses, the effects of stock appreciation rights and restructuring expenses.

The company's shares split two for one at the end of October, so the current 51-cent earnings estimates that were expected by analysts is half of the company's pre-split earnings target.

H-P was lately off $5.13 to $34 in preopen trading on Instinet, the electronic trading exchange. Its 52-week high is $68.09. The company was scheduled to announce earnings on Wednesday.