HP Continues Struggle To Turn Around Ship In Moribund Q3

HP reported a loss of $8.9 billion, or $4.49 a share, during the quarter ended July 31, compared to the 93 cents per share profit it recorded in last year's Q3. Non-GAAP earnings per share was $1, down nine percent year over year.

HP's revenue during the quarter dipped five percent year over year to $29.7 billion. Wall Street analysts were expecting 98 cents a share and $30.19 billion in revenue.

For its fiscal 2012 year, HP is expecting non-GAAP earnings of $4.05 to $4.07 cents per share, and a GAAP loss of between $2.23 and $2.25 per share.

"Make no mistake about it, we're still in the early stages of the turnaround," Whitman said on the call.

The Q3 loss, which HP announced earlier this month, stems from the write-down of its 2008 acquisition of EDS and higher than expected costs from its early retirement program and corporate restructuring.

[Related: HP Services Takes $8 Billion Charge From EDS Deal; Services Chief Departs ]

HP's Software division revenue grew 18 percent year over year with an 18 percent operating margin, a figure that includes results from Autonomy. Within that, software licensing grew two percent, support revenue grew 16 percent and services revenue jumped 65 percent.

HP announced its $10.3 billion acquisition of Autonomy a year ago this week, and Whitman offered a glimpse into the state of that group, which has lost several top level employees this year. HP's Autonomy Live Vault product passed the 10,000 customer mark during Q3, but overall Whitman said much work needs to be done to improve Autonomy's performance.

HP's PC business revenue dropped 10 percent compared to last year's quarter with a 4.76 percent operating margin. Sales to consumers sipped 12 percent and sales to businesses fell 9 percent. Whitman said the PC market remains weak and channel inventory is currently higher than HP would like.

"The reality is we're locked in serious competitive battles," Whitman said on the call.

HP's Imaging and Printing Group (IPG) division revenue dropped 3 percent with a 15.8 operating margin, but printer sales to consumers fell 23 percent.

Revenue from HP's Enterprise Servers, Storage and Networking (ESSN) division fell 4 percent year over year with a 10.9 percent operating margin.

HP's Services division revenue fell 3 percent year over year with an 11 percent operating margin, while Technology Service revenue dropped 1 percent. HP earlier this month said John Visentin, who last August replaced the retiring Tom Iaonotti as head HP of Enterprise Services, is leaving the company "to pursue other interests."

Mike Nefkens, the London-based senior vice president and general manager of the EMEA branch of HP Enterprise Services, will replace Visentin on an acting basis. HP also named Jean-Jacques Charhon, senior vice president and CFO of HP Enterprise Services, as COO of the division.

HP's 3Par revenue grew more than 60 percent during the quarter, according to Whitman. But that was one of few bright spots during a quarter that once again illustrated the magnitude of the challenge Whitman faces in turning around the aircraft carrier that is HP.