HP lowers financial guidance with webOS shutdown

HP's stock drops on news it will discontinue webOS and look to spin off its PC group

After pulling the plug on its webOS phones and tablet computers Thursday, Hewlett Packard said it expected to be less profitable than expected during its current fiscal quarter, which ends Oct. 31.

The company announced earnings Thursday that were on the low side of analyst expectations, numbers that were largely overshadowed by the company's dramatic decision to pull out of the tablet market altogether and to consider options for either spinning out its PC group or putting it up for sale.

Going forward, HP said that fourth-quarter revenue will be between $US32.1 billion and $32.5 billion, and that earnings per share will be in the $1.12 to $1.16 range, excluding charges from the webOS shutdown. The market had been expecting earnings of $1.31 on sales of $34 billion, according to a survey of analysts by Thomson Reuters.

The shuttering of webOS will cost between $0.61 and $0.68 per share, HP said.

Earnings for HP's third quarter, ended July 31, were $1.10, on revenue of $31.2 billion, up from $30.7 billion in the third quarter of 2010. Both of those numbers were in line with market expectations.

HP also confirmed that it is in discussions to buy analytics software vendor Autonomy, a deal reportedly valued at $10 billion.

HP released some financial information earlier than expected Thursday after media reports of the PC sell-off and Autonomy acquisition surfaced. It is scheduled to release fourth quarter results later on Thursday.

Traders didn't like the news. HP's stock (HPQ) was down more than 7 percent, trading at $29.14 late Thursday on a down day in the markets. Late Thursday the Dow Jones Industrial Average had dropped more than 4 percent.

Robert McMillan covers computer security and general technology breaking news for The IDG News Service. Follow Robert on Twitter at @bobmcmillan. Robert's e-mail address is robert_mcmillan@idg.com

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags business issuesservicesstoragesoftwareHewlett-Packardhardware systemsrestructuringSEC Filings

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Robert McMillan

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?