HP Inc., the hardware-focused business created by the split of the former Hewlett-Packard Co. into two companies late last year, was able to beat Wall Street expectations on revenue and profit for its fiscal third quarter.

However, HP released a forecast profit for the current quarter that is below the estimates of analysts, sending the price of the company's shares tumbling.

According to HP's earnings release for its fiscal third quarter, the company posted a revenue of $11.89 billion and a net profit of $783 million, equivalent to 45 cents per share, for the quarter. Adjusted for one-time costs and gains, net profit was further boosted to 48 cents per share.

Revenue in the third quarter from the company's computer business improved by 7.5 percent compared with the second quarter of the company's fiscal year but remained flat compared with the corresponding quarter last year, with sales of notebooks performing better. HP's computer business, which generates two-thirds of the company's total revenue, started to show signs of bouncing back after two consecutive drops in the previous quarters.

However, the company's revenue was down compared with the $12.36 billion that the Hewlett-Packard division then reported in the corresponding quarter last year. Notebook shipments increased by 12 percent, but this was offset by weak sales for desktop computers and low demand coming from commercial customers. In addition, HP's printer business saw revenue drop by 14.3 percent compared with the previous fiscal year's third quarter and decrease by 4.6 percent compared with the second quarter.

For the current quarter ending in October, HP released a profit outlook of 34 cents to 37 cents per share, which was much lower than the 41 cents per share that most analysts were expecting for the company. The lower forecast profit for the company's fiscal fourth quarter sent the stock price of HP down 77 cents, which is equivalent to over 5 percent, at $13.63 per share in after-hours trading after the release of the company's earnings report.

According to HP CFO Cathie Lesjak, the lower profit outlook for the current quarter despite the somewhat stability of the computer business was due to the company making investments to help boost the sales of its high-end printer products. HP is looking to sell more units of the high-end printers in locations that have been found to utilize printers more, which could also lead to increased sales of supplies and services for these printers.

Lesjak added that the company believes that the decision to invest in the sales of its high-end printers is a correct one and will lead to a good outcome in revenues in the near future.

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Tags: HP Earnings