The 10-second takeaway
For the quarter ended April 30 (Q2), Hewlett-Packard beat expectations on revenue and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue dropped slightly and GAAP earnings per share contracted significantly.
Margins dropped across the board.
Hewlett-Packard reported revenue of $30.69 billion. The 25 analysts polled by S&P Capital IQ expected sales of $29.91 billion on the same basis. GAAP reported sales were 3.0% lower than the prior-year quarter's $31.63 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.98. The 28 earnings estimates compiled by S&P Capital IQ predicted $0.91 per share. GAAP EPS of $0.80 for Q2 were 24% lower than the prior-year quarter's $1.05 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 23.3%, 130 basis points worse than the prior-year quarter. Operating margin was 7.5%, 240 basis points worse than the prior-year quarter. Net margin was 5.2%, 210 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $30.34 billion. On the bottom line, the average EPS estimate is $1.02.
Next year's average estimate for revenue is $122.64 billion. The average EPS estimate is $4.04.
The stock has a three-star rating (out of five) at Motley Fool CAPS. Among 770 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 712 give Hewlett-Packard a green thumbs-up, and 58 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Hewlett-Packard is hold, with an average price target of $30.29.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.