Investors could be forgiven for looking past HP’s (NYSE: HPQ) quarterly results, given the company’s plans to dramatically remake itself by acquiring EDS (NYSE: EDS), but the numbers were pretty impressive nonetheless.
HP pre-announced better than expected quarterly results last week when it announced plans to acquire EDS, and provided more details on its April quarter in a press release and conference call after the close today.
HP grew sales 11% in the quarter to $28.3 billion, and non-GAAP earnings of 87 cents a share were up 24%, both better than Wall Street analysts expected. Results were driven by strong notebook, ESS blade, midrange storage and software sales, and sales outside of the Americas. Revenue in the Americas rose just 4%.
On the company’s conference call, CEO Mark Hurd called the U.S. a “very spotty market” at the moment.
The company reaffirmed current quarter and full-year estimates, but its shares were little changed after hours after slipping half a percent during the day.
The rest of the market took a much bigger hit during the day, as rising inflation, a falling dollar and a weak outlook for retail sales sent the major indexes tumbling, along with comments from a Federal Reserve official that suggested that the Fed is done cutting interest rates.
Micron (NYSE: MU) led a weak chip sector lower, falling 6% on memory pricing concerns. It was the second straight day that flash memory worries weighed on the market.
Microsoft (NASDAQ: MSFT) lost 2.4% on news that the company is trying to buy Yahoo’s (NASDAQ: YHOO) search business.
EMC (NYSE: EMC) and VMware (NYSE: VMW) lost ground on downgrades from a Bernstein analyst.
Netflix (NASDAQ: NFLX) rose 2% on plans for a TV set-top box.
The Nasdaq fell 24 to 2492, the S&P lost 13 to 1413, and the Dow tumbled 199 to 12,828. Volume rose to 3.86 billion shares on the NYSE, and declined to 2.04 billion on the Nasdaq. Decliners led by a 20-11 margin on the NYSE, and 17-11 on the Nasdaq. Downside volume was 73% on the NYSE, and 72% on the Nasdaq. New highs-new lows were 87-69 on the NYSE, and 56-113 on the Nasdaq.