HP shares slide after quarterly profit falls short

SAN FRANCISCO — Tech bellwether Hewlett-Packard's long comeback trail took a detour Wednesday when it delivered financial results that fell short of expectations.

But HP CEO Meg Whitman, who has vowed to turn around the company, says her five-year plan "is on track" as long as HP "continues to execute."

"I listen closely to investors, but I don't watch the stock price" day to day, Whitman told USA TODAY in a phone interview. "We have a cogent strategy and re-energized innovation... but we have a lot more work to do."

HP shares slid nearly 8% to $23.45 in after-hours trading. The company announced its results after markets closed. For the year, however, they are up more than 70%.

The company's third-quarter results announced Wednesday — earnings and revenue were down from the same quarter a year ago — come amid several darkening clouds on the computing front. The slumping PC business represents about 30% of HP's revenue and 10% of its profits.

HP said it earned an adjusted 86 cents per share on revenue of $27.2 billion. In the same quarter a year ago, HP reported a profit of $1 a share on revenue of $29.7 billion.

Analysts polled by Thomson Reuters expect HP to post profits of 86 cents a share on a non-GAAP basis for its fiscal third quarter on revenue of $27.3 billion, which would reflect a year-over-year decline of 14% and 8%, respectively.

Those same analysts, however, see progress on the horizon. Of 31 polled by Thomson Reuters, only six recommend selling the stock.

It was the fifth consecutive quarter of sales and profit declines from the Silicon Valley-based tech giant — two years into Whitman's reign.

The results underscore general softness in the tech industry after a six-year boom ignited by the iPhone's introduction in 2007. Last week, computer-networking giant Cisco Systems said it plans to slash 4,000 jobs. Venture capital has slipped 7% this year.

Tech shares have tumbled amid slackening growth in key earnings reports. Though the S&P 500 is up about 20% as of mid-August, tech stocks in the index were up only 11% — one of the lowest-performing categories.

HP CEO Whitman stressed her five-year reclamation plan isn't expected to show its first fruits until next year. She believes it can bounce back by building more PCs with touch-control screens, selling more tablets and expanding its product lines in business software, data analysis and storage, and technology consulting.

HP has been steadily rebuilding since a year ago, when it announced a $9.2 billion write-down on its acquisition of EDS and it wrote off $8.8 billion of the $11 billion it spent on British software firm Autonomy. HP is also in the process of shaving 29,000 jobs.