H-P Forecast Misses Estimates Amid PC Slump

Hewlett-Packard Co. (HPQ) forecast first- quarter profit that missed analysts’ estimates, a sign that Chief Executive Officer Meg Whitman may struggle with the slump that led to the ouster of her predecessor, Leo Apotheker.

Profit for the quarter ending in January will be 83 cents to 86 cents a share, excluding some items, the company said in a statement. The average estimate of analysts surveyed by Bloomberg was for $1.11 a share. The profit forecast for 2012 also fell short of predictions.

Hewlett-Packard is suffering as some consumers shun personal computers and businesses curtail spending on technology services. Apotheker was replaced by Whitman on Sept. 22 after slashing forecasts three times in less than a year and jarring investors with a decision to explore spinning off the PC unit. The revenue outlook for this quarter and fiscal 2012 show that Whitman has a more realistic sense of the company’s challenges, said Chris Whitmore, an analyst at Deutsche Bank AG.

“Estimates now are at a level where they can hit rather than missing, which they developed a track record of doing,” said Whitmore, who has a “sell” rating on Hewlett-Packard. “Investors wanted to see the fiscal 2012 bar lowered.”

The company’s Aug. 18 announcement that it would buy software maker Autonomy Corp. for $10.3 billion is adding to Hewlett-Packard’s debt, Whitmore said.

Hewlett-Packard was little changed in late trading. It had fallen $1.13, or 4 percent, to $26.86 at 4 p.m. in New York. The shares have lost 36 percent this year.
Boosted by BRICs

Profit excluding some items for the fiscal fourth quarter, which ended Oct. 31, was $1.17. That exceeded $1.13, the average estimate of analysts surveyed by Bloomberg. Sales of $32.1 billion matched analysts’ projections.

Results were buoyed as a 9 percent sales increase in the BRIC category, which includes Brazil, Russia, India and China, partly made up for declines in the U.S. and Europe.

Whitman is working to integrate Autonomy and on Oct. 27 said she’ll keep the PC business in house. Now, she is resetting Wall Street’s expectations for next year.

Profit excluding certain items for fiscal 2012, which began Nov. 1, will be at least $4 a share, missing the average forecast for profit of $4.58.
Sightline Payments Kirk Sanford
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