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HP Plunges on Early Release

Updated from 3:38 p.m. ET to include details from full release.

NEW YORK (TheStreet) HP (HPQ - Get Report) shares plunged after the Silicon Valley tech giant posted fiscal second-quarter results that were worse than expected, as revenue missed expectations.

HP earned 88 cents a share on $27.3 billion in revenue. For the second-quarter, analysts surveyed by Thomson Reuters expected HP to earn 88 cents a share on $27.42 billion in sales.

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The Palo Alto, Calif.-based HP noted that revenue from Personal Systems was up 7% year over year, but Printing revenue fell 4% during the same time. Enterprise Group revenue was down 2% year over year, while Enterprise Services revenue fell 7% during the same time. Software revenue was flat, while HP Financial Services revenue was down 2% year over year, according to the release.

"With the first half of our fiscal year completed, I'm pleased to report that HP's turnaround remains on track," said Meg Whitman, HP's president and CEO, said in the release. "With each passing quarter, HP is improving its systems, structures and core go-to-market capabilities. We're gradually shaping HP into a more nimble, lower-cost, more customer- and partner-centric company that can successfully compete across a rapidly changing IT landscape."

In May 2012, the company had adopted a multi-year restructuring plan to cut 34,000 jobs to re-engineer the workforce. The company increased the size of its workforce reduction on Thursday, saying that it plans to cut an additional 11,000 to 16,000 jobs.

For the fiscal 2014 third quarter, HP estimates non-GAAP earnings to be between 86 cents and 90 cents a share. For fiscal 2014, HP said it believes non-GAAP earnings will be between $3.63 and $3.75 a share. The company will take a 95 cent a share GAAP charge "related primarily to the amortization of intangible assets and restructuring charges."

The company noted in the release that cash flow from operations was $3 billion, and returned $1.1 billion to shareholders in the forms of dividends and buybacks during the second quarter. Net cash improved by $1 billion, the ninth consecutive quarterly improvement of approximately $1 billion or more.

Shares of HP were sharply lower after the early release, falling 2.3% to close at $31.78, after having traded as high as $33.36 earlier in the session.

--Written by Chris Ciaccia in New York

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