Hewlett-Packard (HPQ) Falls on Earnings

Hewlett-Packard Company (HPQ) reported first quarter 2015 non-GAAP EPS of $0.92 after the close Tuesday, compared to the consensus estimate of $0.91. Revenues declined 4.7% from last year to $26.84 billion. Analysts expected revenues of $27.35 billion. Cash flow from operations in the first quarter came in at $744 million, down 75% from the prior-year period. The stock is now down $2.00 to $36.49 on more than 14.66 million shares.

For Q2, the computing giant provided EPS guidance of $0.84-$0.88 versus consensus of $0.96 per share. The company cited currency headwinds for the weak outlook, as it battles with the impact of a stronger dollar.

“While we were able to manage the impact of currency in the quarter and deliver earnings as expected, we believe the impact on FY15 will be significantly greater than we anticipated in November,” HP CEO Meg Whitman said in a statement. “We’ll work hard to offset these impacts through re-pricing and productivity, but fully mitigating currency movements of this size would require reducing investments and mortgaging our future. We won’t do that.”

On valuation measures, Hewlett-Packard Co. shares, which currently have an average 3-month trading volume of 10.7 million shares, trade at a trailing-12 P/E of 14.69, a forward P/E of 9.30 and a P/E to growth ratio of 1.98. The median Wall Street price target on the name is $40.30 with a high target of $50.00. Currently ticker boasts 11 ‘Buy’ endorsements, compared to 14 ’Holds’ and no ‘Sell’.

Profitability-wise, HPQ has a t-12 profit and operating margin of 4.50% and 7.91%, respectively. The $70.59 billion market cap company reported $12.91 billion in cash vs. $19.52 billion in debt in its most recent quarter.

HPQ currently prints a one year return of about 31%, and a year-to-date loss of 4.83%.

The chart below shows where the equity has traded over the last 52 weeks.

Hewlett-Packard provides technologies and software solutions to the government, health, and education sectors worldwide. The company was founded in 1939 and is headquartered in Palo Alto, California.

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