REUTERS

(REUTERS)

HP Reports Profit Above Estimates, Shares Up

Technology Reuters

Hewlett-Packard Co, the world's No. 2 PC maker, reported a quarterly profit above market estimates, helped by cost cuts, sending its shares up more than 3 percent in after-market trading.

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The company said its planned separation was on track and forecast related dis-synergies of about $400 million-$450 million.

"I think it will alleviate concerns about what level of dis-synergies they would have to absorb in the first year following the split," Cross Research analyst Shannon Cross said.

The 75-year-old company has said it will separate its computer and printer businesses from its faster-growing corporate hardware and services operations.

HP's net income fell to $1.01 billion, or 55 cents per share, in the second quarter ended April 30, from $1.27 billion, or 66 cents per share a year earlier.

Excluding items, the company earned 87 cents per share.

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Analysts on average had expected a profit of 85 cents, according to Thomson Reuters I/B/E/S.

Ongoing cost reductions and focus on higher-margin sales drove profit, Cross said.

Revenue dropped to $25.45 billion from $27.31 billion.

The company forecast an adjusted profit of 83-87 cents per share for the third quarter. Analysts were expecting 87 cents.

HP also said Cathie Lesjak will become the Chief Financial Officer of HP Inc, while Tim Stonesifer will become the CFO of Hewlett Packard Enterprise. 

(Reporting by Abhirup Roy and Anya George Tharakan in Bengaluru; Editing by Joyjeet Das)