Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Hewlett-Packard (NYSE:HPQ) fell as much as 10% Wednesday after the company missed revenue estimates for its fiscal first quarter ended in January and, crucially, lowered its guidance for the current fiscal year.

So what: The following table includes Hewlett-Packard's "misses" with regard to the fourth quarter and full-year earnings-per-share (EPS) guidance for 2015:


Fiscal-First-Quarter Results

Consensus Estimate (pre-announcement)


$26.8 billion

$27.3 billion







Fiscal Q2 EPS*



Fiscal 2015 EPS*



*Adjusted. Sources: Thomson Financial Network, Bloomberg, Hewlett-Packard

Hewlett-Packard is laying the blame for its weak guidance at the doorstep of the strong dollar, which it estimates will cost the firm $0.09 worth of earnings per share in the current quarter and $0.30 for the full year (HP generated nearly 65% of its revenues outside the U.S. in fiscal 2014.) Indeed, once you add those figures back to the midpoint of the guidance range for the current quarter and the full year, you obtain estimates that are essentially in line with Wall Street's consensus estimates.

However, note that HP brought its full-year (adjusted) EPS forecast down by 7.6% (based on the midpoint) relative to the guidance it provided at the end of November; meanwhile the Dow Jones FXCM Dollar Index has appreciated by less than 4% during the same period.

Furthermore, the company also predicted that it would incur a higher-than-anticipated $2 billion in costs over two years related to its pending split into two companies (one focused on the consumer, the other on the enterprise.) That figure -- which could ultimately go higher -- contributed to a whopping $3 billion reduction in guidance for cash flow in the current year to $3.5 billion to $4 billion. Ouch!

Now what: Citigroup believes that today's price decline is an "attractive entry point for those looking to own the stock for the break-up." That may well be true, but it could require a bit of patience to see that viewpoint vindicated. In conclusion: Though it doesn't look a screaming buy, HP may be worth a look for long-term, value-oriented investors.