The Associated Press headline reads:
"Hewlett-Packard's slump continues as revenue drops 10%
The company posts earnings of $1.1 billion in its fiscal second quarter, down 32% from a year earlier. But its stock rises on its guidance for the current quarter."
The story, using almost precisely the same words,was more tepid than the market reaction:
"Hewlett-Packard Co.'s slump continues. Its quarterly earnings marked the seventh consecutive decline in revenue compared with the same period the previous year.
And HP's 10% decrease in revenue during the three months that ended in April was the largest drop so far during the slump.
But HP predicted that its earnings for the current quarter ending in July would be slightly better than analysts have been anticipating. Excluding certain items, the Palo Alto company forecast earnings of 84 cents to 87 cents a share. Analysts on average had projected 83 cents a share, according to FactSet.
Investors seemed to interpret the guidance as a sign that HP's cost-cutting measures imposed by Chief Executive Meg Whitman are starting to pay off, even as the company's sales droop.
HP's stock surged $2.70, or nearly 13%, to $23.93 in extended trading after the release of the results Wednesday.
Most of the erosion in the company's sales occurred under the leadership of Whitman, a former CEO at EBay Inc. and defeated California gubernatorial candidate, who was hired to run HP in September 2011.
Whitman has repeatedly warned that HP's revenue might not start growing at an acceptable rate for another year or two as she cuts costs, overhauls the company's product line and pushes into more profitable niches in business software, data analysis and storage and technology consulting. In a Wednesday statement, she reiterated that the company remains on a "multi-year journey."
The San Francisco Chronicle posted a 3 inch 'column' reporting the bare facts with no particular bias, other than the typical "this didn't happen near here, so it doesn't matter" attitude.
By contrast, the San Jose Mercury-News headlined it on page 1 business section -- "HP PROFIT EXCEEDS FORECASTS", showing three graphs and Meg's picture, with 40 column inches of coverage in Steve Johnson's bylined story.
Johnson quoted a number of analysts, including Brean Capital which said "our industry checks are starting to see pockets of change in culture at HP -- which we believe can serve the company well going forward."
Brian Marshall at Int'l Strategy Group was less sanguine, and Tony Socconaghi of Bernstein Research (he's been down on HP and on Meg for some time now) offered these pearls of wisdom: "either Meg Whitman improves company performance over the next 12-18 months or the board (or activists) will break up the company."
And Deutsche Bank analysts (lessee now, weren't they the ones who switched their vote -- probably illegally -- the morning of the ballot for the Compaq deal?) cautioned: "all of HP's major business lines continue to face structural decline", adding ominously (in Johnson's words) "we do not see a quick fix for any of these issues."
Otherwise, Johnson's story was plain vanilla, resurfacing the issues for the failed TouchPad, failed phone, dropping PC sales, slumping ink and printer sales, several bad acquisitions (naming again, with the $$$ of write-offs for Attensity, EDS, and Palm acquisitions -- $8.8B, 8.0B, and 1.0B in the past 3 years). He also reminded readers of the board vote against Hammergren and Thompson and Ray Lane. These stories, kinda like Sergio Garcia's, take on a life of their own, and they'll haunt for years.
The San Francisco Chronicle posted a 3 inch 'column' reporting the bare facts with no particular bias, other than the typical "this didn't happen near here, so it doesn't matter" attitude.
By contrast, the San Jose Mercury-News headlined it on page 1 business section -- "HP PROFIT EXCEEDS FORECASTS", showing three graphs and Meg's picture, with 40 column inches of coverage in Steve Johnson's bylined story.
Johnson quoted a number of analysts, including Brean Capital which said "our industry checks are starting to see pockets of change in culture at HP -- which we believe can serve the company well going forward."
Brian Marshall at Int'l Strategy Group was less sanguine, and Tony Socconaghi of Bernstein Research (he's been down on HP and on Meg for some time now) offered these pearls of wisdom: "either Meg Whitman improves company performance over the next 12-18 months or the board (or activists) will break up the company."
And Deutsche Bank analysts (lessee now, weren't they the ones who switched their vote -- probably illegally -- the morning of the ballot for the Compaq deal?) cautioned: "all of HP's major business lines continue to face structural decline", adding ominously (in Johnson's words) "we do not see a quick fix for any of these issues."
Otherwise, Johnson's story was plain vanilla, resurfacing the issues for the failed TouchPad, failed phone, dropping PC sales, slumping ink and printer sales, several bad acquisitions (naming again, with the $$$ of write-offs for Attensity, EDS, and Palm acquisitions -- $8.8B, 8.0B, and 1.0B in the past 3 years). He also reminded readers of the board vote against Hammergren and Thompson and Ray Lane. These stories, kinda like Sergio Garcia's, take on a life of their own, and they'll haunt for years.
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