SAN FRANCISCO (MarketWatch) — Hewlett-Packard easily cleared a low bar Thursday, posting results that showed a notable drop in profit and sales but nevertheless beat Wall Street's expectations.
Shares of H-P HPQ, -0.42% rallied more than 7% in after-hours trades Thursday, after reporting a 16% decline in net income, with major business units posting lower sales.
The results still surpassed analysts' forecasts, as did the Palo Alto, Calif.-based tech powerhouse's earnings outlook for the current period. The stock gains later eased, but the shares were still up 4.7%.
H-P reported a fiscal first-quarter profit of $1.2 billion, or 63 cents a share, compared with a profit of $1.5 billion, or 73 cents a share, for the year-earlier period. Revenue fell to $28.4 billion, from $30 billion. Adjusted profit was 82 cents a share.
Analysts polled by FactSet were expecting on average an adjusted profit of 71 cents a share, on revenue of $27.9 billion, according to data from FactSet.
Analysts on average were expecting a profit of 77 cents a share, according to data from FactSet.
"Looks pretty solid across the board off a low bar," Sterne Agee analyst Shaw Wu told MarketWatch.
ISI Group's Brian Marshall also said the numbers were "OK versus expectations." The company's business was still in decline overall, "but [it] seems fine for them," he said.
The company "got some decent revenue and earnings-per-share upside in the quarter," Daryanani told MarketWatch, adding that H-P also maintained its fiscal 2013 guidance.
However, he said, the company's enterprise-services business results "were still a big drag," and the its PC business continued to struggle.
H-P's enterprise-services unit saw a 7% year-over-year decline in revenue, while PC sales fell 8% from the year-earlier period.
H-P's report comes at a time of speculation that, given the company's competitive challenges on several markets, the tech giant may consider a breakup.