Considering that PC giant Hewlett-Packard (HPQ) wallowed through a shake-up in its front office, replacing CEO Leo Apotheker — after he announced H-P would be getting out of its core PC business — with former eBay (EBAY) CEO Meg Whitman — who almost immediately announced H-P would retain the business after all — the company's modest beat on both top and bottom lines look pretty good for the company's fiscal 4th quarter 2011 (ended October). Earnings per share (EPS) of $1.17 beat the Zacks Consensus Estimate of $1.13 per share.
Revenues also modestly surprised to the upside at $32.1 billion in the quarter. As a result, H-P was able to make back more than half of its 4% loss in regular Monday trading (a fairly bloody Monday, with the Dow down over 300 points before rallying back to -248 by the close) in the after-market.
For the 4th quarter, analyst following H-P had been holding pat ahead of the report. There has been literally no movement in the consensus EPS estimate over the last 90 days. For Q1 2012 and fiscal 2012, however, several downgrades were cited — 7 of the 23 analyst estimates had gone lower for the January quarter, and 6 had been downwardly revised for next fiscal year.
That said, H-P has guided even lower for next quarter. Consensus had been $1.11 including the lowered revisions, but H-P's outlook now expects only 83-86 cents per share in its Q1.
Clearly, CEO Whitman has her work cut out for her. Adding to the company's potential woes — and more articulation is being sought in the ongoing conference call for Hewlett-Packard — are the recent floods in Thailand and an expected severe shortage in the company's hard disk drive market. Also, a potential price war in the printing space may be forthcoming.
Perhaps these issues are baked into the cake for H-P's Q1 guidance. But for right now, Hewlett-Packard not falling on its face during its transitional phase is bringing out the bull sentiment in after-hours traders.
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