What happened

Shares of HP (NYSE:HPQ) -- that's Hewlett-Packard to stock market old-timers -- are getting hammered in early trading Friday, down 4.7% as of 10:55 a.m. EDT after the PC maker "beat" on earnings last night but scared the market with its guidance.  

Expected to report $0.55 per share on sales of $14.6 billion in its fiscal third-quarter 2019, HP met analysts' revenue forecast and delivered a pro forma profit of $0.58 -- and GAAP earnings of $0.78 per share.  

Glowing red arrow trending down

Image source: Getty Images.

So what

At first glance, that doesn't look too shabby at all. Although sales didn't rise much year over year, HP's operating profit margin ticked up 40 basis points in comparison to Q3 2018. Pro forma profits climbed a healthy 11.5%, GAAP earnings surged ahead 44.4%, and free cash flow jumped 55.4%.

Now what

It seems the problem wasn't what HP earned last quarter but, rather, what it's promising for the quarters to come. New guidance from the company calls for GAAP earnings of between $0.51-$0.55 per share in Q4 and pro forma profits from $0.55 to $0.59. At the $0.57 midpoint, that's a penny short of the $0.58 per share that Wall Street wants to see.

Adding to investor worries, HP announced that CEO Dion Weisler is stepping down to deal with a family health matter, effective Nov. 1. His replacement, HP imaging and printing head Enrique Lores, has already been named, but even this certainty in leadership continuity isn't settling investor nerves.