HP is tanking thanks to woeful guidance

HP shares were down by almost 10% Wednesday morning after the company announced earnings yesterday that warned investors that in the coming months it would be hurt, and hurt badly, by foreign exchange rates.

The company expects FX rates to hurt its earnings per share by $0.09 next quarter and trim off $3.3 billion in revenue, $1.5 billion in operating profit, or $0.60 in earnings per share for its full fiscal year (which ends in October).

HP CFO Cathie Lesjak and HP CEO Meg Whitman insist that if you calculate out the impact of FX, the company's turnaround is right on schedule. It expects revenue to stop shrinking by the end of 2015.

Although investors aren't happy right now, many Wall Street analysts are still generally bullish on stock, mostly because they think investors should get in on the action before the company splits.

Merrill Lynch's Wamsi Mohan writes in a research note, "We maintain our BUY and continue to believe it is attractive to own the stock before the split as the enterprise value of the separate companies added together is worth more than the combined enterprise."

Barclay's Ben Reitzes writes, "Our overweight rating is based on improving execution, an improved balance sheet and still attractive valuation ... The business doesn't seem to be experiencing disruptions from the split scheduled for the end of the [fiscal year]."

Ditto for JP Morgan's overweight rating. Rod Hall writes in his research note, "The company continues, and even accelerates, cost reductions while fundamental numbers hold together well. We believe the company currently offers a solid earnings growth story on continued rationalization of opex at a time when large cap earnings growth is hard to come by. We also believe that HP's planned split up should create additional value for shareholders."