Shares of computer and printer producer Hewlett-Packard HPQ +5.73% took a last-minute dive into negative territory Thursday afternoon after accidentally releasing the first page of its second quarter earnings report a few minutes too early — and not only was the timing of the results unexpected, but so were the company’s sales, which came in under the predictions set forth by Wall Street analysts. And in other less-than-fantastic news, the technology company also said that in an effort to achieve cost savings, it will need to lay off more people than it initially planned.
HP reported $27.3 billion in second quarter revenue, a figure that marks a 1% decline over the revenue reported for the prior-year period and misses the $27.35 billion analyst consensus. Net income came in at $1.27 billion, down from $1.4 billion in the prior-year period and resulting in GAAP earnings of 66 cents per share, up 20% from the 55-cent earnings per share reported this same time in 2013. Excluding special items — like a one-time after tax charge related to the amortization of intangible assets — the company posted earnings of 88 cents per share, a 1% increase over the non-GAAP 87 cents per share from the prior-year period and coming in line with the analyst consensus.
“With the first half of our fiscal year completed, I’m pleased to report that HP’s turnaround remains on track,” HP president and CEO Meg Whitman said in a statement Thursday afternoon. “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.”
However effective this turnaround is, the effort means that an additional 11,000 to 16,000 positions will be eliminated from the company’s workforce. HP had previously stated that 34,000 positions would be eliminated as a result of a restructuring plan to lower costs and deliver better results, but on Thursday said that as it attempts to reengineer it workforce, it needs to up that number layoffs by the 11,000 to 16,000 range.
Looking ahead to its third fiscal quarter and beyond, HP said it expects third quarter non-GAAP earnings to fall between 86 cents and 90 cents per share and full-year 2014 non-GAAP earnings to fall between $3.63 and $3.75 per share. The company expects to incur a 27-cent per-share charge in the third quarter and a 95-cent per-share charge on a full year basis as a continued effect from the amortization of assets and other restructuring efforts.
Following the release of the earnings results, which were scheduled for after the closing bell but surprised investors and analysts alike and came out while regular trading was still in session, shares of HP immediately took a turn out of positive territory and dived into the red, eventually closing with a 2.3% decline. The drop continued as the after-hours trading session picked up, and shares of HP are currently down more than 1.8% in after-hours trading. Year-to-date, the stock is up 17.6%.