Q4 Hewlett-Packard Earnings Fail to Impress

The Q4 Hewlett-Packard earnings (NYSE: HPQ) released today (Tuesday) after the market close were in line with expectations, but put a less-than-flattering light on a five-year turnaround plan that has yet to show convincing results.

The fourth-quarter earnings were exactly as forecast, coming in at $1.06 a share, a 5% increase from the same quarter a year ago. Revenue was $28.4 billion, falling just short of expectations for sales of $28.76 billion. Revenue was down 2% from the year-ago quarter.

Hewlett-Packard stock dipped about 1% in after-hours trading to $37.34.

"I'm excited to say that H-P's turnaround continues on track," said Hewlett-Packard Chief Executive Officer Meg Whitman, which is something she says in pretty much every earnings announcement these days. Although she did add, "There's still a lot left to do."

But the key to Hewlett-Packard's earnings lies in how each of its segments performed.

Investors are paying particular attention to HPQ's individual businesses now that the company is set to split in two next year.

Announced in early October, the idea is to spin off the legacy printer and PC business into a company called HP Inc. The corporate hardware, cloud, and software businesses, meanwhile, will become known as Hewlett-Packard Enterprise.

While the HPQ earnings had a few bright spots, most segments again declined compared to the same period a year ago. While not catastrophic, at some point soon those numbers need to start turning positive.

For that matter, the annual numbers, which H-P also released today, told the same story. Fiscal 2014 revenue of $111.5 billion was down 1% from 2013. That continues a downward trend that began in 2011 when H-P's annual sales were $127.25 billion.

And while 2014 earnings per share (EPS) of $3.74 is an improvement over last year's $3.56, much of that came from cost-cutting.

Guidance for 2015 is for EPS of $3.83 to $4.03, hopefully on the back of some kind of growth.