(Updates from 12:01 p.m. ET with closing information.)NEW YORK ( TheStreet) -- Hewlett-Packard ( HPQ ) shares plummeted 12.49% to $22.21 following the release of bleak third quarter earnings. Revenues were $27.2 billion, down from $29.7 billion in the same quarter last year. Analysts surveyed by Thomson Reuters expected $27.29 billion. EPS was 86 cents per share, in line with analysts' estimates and down from $1 year-over-year. Consumer PC revenue fell 22% from the prior year, while enterprise revenue fell 11% in the same period. CEO Meg Whitman stressed HP's current restructuring efforts. "We once again achieved the financial performance we said we would," Whitman said in a statement. "I remain confident that we are making progress in our turnaround. We are already seeing significant improvement in our operations, we are successfully rebuilding our balance sheet, our cost structure is more closely aligned with our revenue and we have reignited innovation at HP, with a focus on the customer." In a conference call, Whitman said that it was "unlikely" that the flailing Palo Alto-based firm would see revenue growth in 2014.
Shares of Yahoo! ( YHOO ) rose 2.73% to $27.80 after reports that it the most traffic of any U.S. website. ComScore.com released its monthly ranking of U.S. web traffic. The research firm reported that in July 2013, for the first time since July 2011, Yahoo! surpassed Google ( GOOG ). Of 225 million Internet users during the period, 87.2% of them visited a Yahoo! site, accounting for 196.65 million unique visitors. In contrast, Google held the number 2 slot with 192.25 million unique visitors. Yahoo!'s numbers are actually even higher than reported because the results did not include traffic from Yahoo! acquisition Tumblr.
Microsoft ( MSFT ) shares rose 2.31% to $32.34 following a bullish analyst note. Rick Sherlund of Nomura upgraded Microsoft to "buy" from "neutral" with a $38 price target. Although the tech giant was removed from the Buy list in April 2013 due to poor fundamentals, Sherlund writes that although those fundamentals are still weak, "stable enterprise business and strong cash flows could support a potential activist agenda for large share repurchase, substantially greater dividend and management succession plan." A "potential catalyst event" in upcoming months would "potentially alter corporate governance at the company and benefit shareholders." He predicts that hedge fund ValueAct Capital, which owns less than 1% of Microsoft stock, will rally other shareholders to replace one of Microsoft's nine board members. Microsoft reported disappointing fourth quarter earnings in July, with EPS of 52 cents and revenues of $19.9 billion, versus analysts' expectations of 75 cents and $20.73 billion.
Closing prices: HPQ dropped 12.5% to $22.22, YHOO rose 3.1% to $27.90 and MSFT rose 2.5% to $32.39. -- Written by Laura Berman in New York Follow @LauraBermanTST