HP shares tank after accidental quarterly earnings release; up to 16K more job cuts coming

Shares of Hewlett-Packard are falling in after-hours trading after the company reported its fiscal second quarter earnings. It also said it would cut 11,000 to 16,000 more jobs than it was previously planning to cut.

Revenue in the fiscal quarter ended April 30 was $27.3 billion, with earnings per share of 88 cents. Analysts had been expecting higher revenue of $27.43 billion and 88 cents per share in net income.

Oddly, HP accidentally published the results early, ahead of the 4 p.m. Eastern standard time closing bell.

HP shares closed at $31.78 a share, down 2.3 percent. In after-hours trading, HP’s stock fell another 1 percent to $31.32 a share.

HP chief executive Meg Whitman said in a statement, “With the first half of our fiscal year completed, I’m pleased to report that HP’s turnaround remains on track. With each passing quarter, HP is improving its systems, structures and core go-to-market capabilities. We’re gradually shaping HP into a more nimble, lower-cost, more customer- and partner-centric company that can successfully compete across a rapidly changing IT landscape.”

But despite that upbeat talk, HP also announced that it is eliminating an additional 11,000 to 16,000 jobs over time. The company had previously announced that it was cutting 34,000 jobs.

HP said its personal systems division revenue — which includes PCs and tablets — was up 7 percent from a year ago with a 3.5 percent operating margin. Commercial revenue was up 12 percent and consumer revenue was down 2 percent. Total unit sales were up 10 percent, desktops were up 6 percent, and laptops were up 6 percent.

HP said printing revenue was down 4 percent from a year ago, with a 19.5 percent operating margin. Total hardware units were up 1 percent. Commercial hardware units were up 3 percent, and consumer hardware units were flat. Supplies revenue was down 1 percent.

Enterprise was where HP was weak. Enterprise revenue was down 2 percent. Industry standard servers were up 1 percent, storage was down 6 percent, business-critical systems were down 14 percent, networking revenue was up 6 percent, and tech services was down 5 percent. Overall enterprise revenue was down 7 percent. Software revenue was flat compared to a year ago.

“HP missed revenue, but they did have some bright spots,” said Patrick Moorhead, analyst at Moor Insights & Strategy. “Surprisingly, there was solid growth in PCs in a stagnant market. Unlike IBM, they significantly raised revenues in servers. HP has to make some tough decisions in services and software.”

HP expects 45,000 to 50,000 employees to leave the company, instead of 34,000 previously. HP expects 41,000 people to leave by the end of 2014, with the rest leaving afterward.

In a conference call with analysts, Whitman apologized for the early release of the earnings announcement. “We can assure you that won’t happen again.”