Global business news twenty four hours a day. If Bloomberg dot com the radio plus Mobile act and on your radio, this is a Bloomberg Business Flash Broom, Bloomberg World Headquarters. I'm Charlie Pellett. Moments ago we heard from HP in kit reported third quarter profit the top to analysts estimates help by improving demand for laptops, but shares our trading lower. It says profit excluding some items will be thirty four to thirty seven cents a share in the current quarter.
Now that would fall short of analyst projections of forty cents. A sell off in drugmakers dragged US stocks lawer today. The SMP five hundred index down eleven to seventy five, a drop of five tenths upon percent down, Industrials down sixty five points to drop of four tenths of one percent, and has stack down forty two, a drop of eight
tents of one percent. The tenure down three thirty seconds, the yield one point five six percent, Gold down eighteen ten the ounce the thirteen one four, a drop there of one point four percent. West Texas Intermediate crewed down a dollar thirty at a barrel at fourty six seventy one, a drop there of two point nine percent. So again recapping, we did see a down dave for stocks SMP five hundred index falling eleven, a drop there of five tenths
of one percent. I'm Charlie Pellett. That's a Bloomberg business flash. You're listening to taking stock with bin box at Kathleen Hayes on Bloomberg Radio. Shares of HP are lower by more than five and a half per cent right now after reporting a third quarter results that were better than analysts estimates. But looking into the fourth quarter, HP says that earnings per share from continuing operations will be between thirty four and thirty seven cents versus estimates of between
the thirty eight and forty four cents. Here to tell us more is on En trinivasan On a is an expert when it comes to the semiconductor and hardware business. He's an analyst for Bloomberg Intelligence and Heat joins me now on tell us about HPS results and also their future guidance. The future guidance is the number one driver of why perhaps the stock is down and it's printing. The printing business of HPING continues to be very, very weak.
If you look at Q three numbers, it was down fourteen percent year on year, even with currency it was down ten percent. UM. It's got a very strong operating margin relative of the PC business. But if you look at the hardware side of the printers, I was down ten percent, commercial side was down, consumer sides were down, supplies were down, and and we're not seeing a substantial improvement in that side of the house. So Personal Systems was okay, I mean it was flat here on her
up in constant currency, um and um. You're starting to see some potential stabilization there, but printing continues to be a drag on the business. And fourth quarter guidance is weak, and they're doing some restructuring and continued restructuring, my dad, but you want to see some potential light at the end of the chunnel, this quarter was not it. Well, you're you're right about the continuing cost cuts because according to the company's chief executive Dion Weisler Uh, they expect
to reduce costs by over a billion dollars. I mean, cost gusts do not revenue. You can't make your revenue expand. And in one of the things that we want to see is yes, the operating margin improvement of the castle improvements are are good, particularly their structural cost reductions, and those are those are great things. But one of the things that we do want to see from the analyst community is the slowdown in the rate of decline of
both PCs and printing and potential for improvement. And and we don't see that in the current quarter or the guidance. When the chief executive says that they are trying to invest in higher end products in order to increase their profitability, what kind of higher end products are they talking about.
So in the PC segments that could involve m gaming PCs or two in one laptops, laptops and tablets that are detachables for example UM and in the printing business it is more um A three printers the equivalent of the office printers that you have relatively one per floor if you made the big ones that are typically made by Cannon and xerox UM. And the reason why those are UH an attractive market is because they are high priced, their high margin, and the supply UM agreement that you
have for those printers is also very attractive. So for all those reasons, those segments are attractive, but I mean they're there. These are relatively small segments, and there would entrenched competition in place or entrenched leaders in place. So uh HP has got a little ways to go in
order to move its own revenue leadle from those segments. Well, indeed, just taking a look at the printer net revenue, as you said earlier, down four personal systems UH net revenue, there was flat commercial net revenue down three percent, but the consumer business the revenue was up eight percent. What is HP doing in order to move that particular metric higher.
So one of the things that we've seen last quarter from the market research from you did see um um us PCs grow for the first time in several years. So HP is very strong in UM in the market UM.
So that definitely eight This particular seven second is HB has said that it's walking away from less profitable PC areas where it's not trying to maintain share for the sake of it and it wants profitable share UM and to that those two factors put together, UM likely impacted that eight percent consumer growth on a year on year basis, and even the commercial net revenue decreased. That's a reasonable number.
One PCs are actually defining substantially more than that forward to seven percent, if you go back one to three quarters. And then when it comes to the stock market, it's all about how much something could be worth. And currently the market cap of HP is twenty four and a half billion dollars, but the company has more than five and a half billion dollars in gross cash Is that attractive to investors? It is, and in the cash flow profile,
particularly with the cost cuts um are all attractive. But at the end of the day, if you look at the the technology media telecom space is filled with a lot of these companies that are legacy A companies. You have a bank, you have c s C. You have a lot of these sorts of companies that are slow growth, relatively profitable, and they're in permanent restructuring more from a
cost containment perspective. But you know, after a little while, people gravitator tech for sales and earning growth and you have to demonstrate continuity there on trini us. And thank you very much, senior semiconductor hardware analyst for Bloomberg Intelligence. Thanks for listening to Taking Stock. I'm pim Fox. This is Bloomberg coming up Bloomberg Law is going to be
talking about the unionization of graduate students. A National Labor Relations Board decision means graduate students who teach can unionize.