Hewlett-Packard’s fiscal second-quarter earnings, and official word of a big restructuring program, just hit the Tape.
The company topped estimates on both the top and bottom line. H-P earned 80 cents a share, or 98 cents a share, non-GAAP, on sales of $30. 69 billion. The Street consensus was for earnings of 74 cents a share, 91 cents, non-GAAP, on sales of $29.926 billion.
But the numbers were down from a year ago, when the company earned $1.05 a share, or $1.24, non-GAAP, on sales of $31.63 billion.
Looking ahead, H-P said it estimates non-GAAP 3Q EPS is going to be between 94c and 97c, which was below the Street’s $1.02 EPS expectations. But the company also raised its outlook for the year up to non-GAAP EPS of $4.05 to $4.10, above analysts’ expectations of $4.03. Originally, H-P said it expected better than $4.
Shares are up in late trading, gaining 6.1% to $22.36, in part on a big restructuring plan the company announced, which includes laying off 27,000 employees. That, of course, means costs will go way down, which the Street always loves. It’s far less welcome to the 27,000 being let go, or the ones left behind, for that matter, who have to pick up the slack.
The program will save the company $3-$3.5 billion in fiscal 2014.
H-P says moves “are necessary to improve execution and to fund the long-term health of the company.” H-P will turn its focus on cloud computing, big data analytics and security — areas where many other tech giants are also aiming. One thing that definitely would help the company’s long-term health is steady leadership at the top.
The company’s stock has been on a mostly downward trek from $54.60 in April 2010, four months before CEO Mark Hurd left.