Hewlett-Packard Co. (NYSE: HPQ), the world's biggest computer company, reported third-quarter financials after the market closed Wednesday, taking a record charge of $10.8 billion that resulted in a net loss of $8.9 billion, or $4.49 a share.

But the charges appear to be over, and the company also reported revenue of $29.7 billion, about $500 million below estimates, as the No. 1 maker of PCs reported sales of PCs slid about 10 percent over the year-earlier quarter.

Earnings from operations were $2 billion, or $1 a share, two cents above estimates. Including the charges, the net loss was $8.9 billion, or $4.49 a share, reversing prior-year net income of $1.9 billion, or 93 cents a share.

The company also forecast lower-than-forecast expectations for full-year results. On an operating basis, they should range around $4.06 a share, about a nickel below prior estimates. The loss, for write-offs of acquisitions and severance of as many as 14,000 employees, will lead to a full-year loss around $2.24 a share compared with fiscal 2011 net income of $3.32 a ahare.

The news sent HP shares up about 2 percent after hours, to $19.55, up 35 cents, apparently because the company said its restructuring won't require additional charges.

CEO Margaret (Meg) Whitman, 56, on the job at the Palo Alto, Calif., company nearly 11 months, has never fully detailed a plan to get HP moving solidly again. Instead, she announced certain mid-course adjustments, like deciding to retain the world's biggest PC business but then revamped its printers division, also the world's biggest.

"We're making decent progress," Whitman said when the results were announced.

In certain respects, she's copying the strategy used by new CEO Louis Gerstner at International Business Machines (NYSE: IBM), then the biggest computer maker, 19 years ago, when he took similar record charges in his first year as CEO then aligned the Armonk, N.Y. company on its course of concentrating on enterprise services and software. Gerstner exited the PC business, which Whitman earlier decided to keep.

Whitman, a successful CEO at online auction house eBay Inc. (Nasdaq: EBAY) before failing to win the governorship of California in 2010 on the Republican Party line, implemented a series of smaller measures, including promoting longtime software boss Bill Veghte to chief operating officer, a job HP had lacked for years.

She also replaced printers chief Vyomesh Joshi with Todd Bradley, head of the PC unit, who now oversees both operations.

As well, Whitman, a Princeton economics graduate with a master's degree in business administration from Harvard, has also taken mega-charges for prior acquisitions, notably including Compaq Computer Corp. in 2001 and Autonomy PLC last year. 

"HP is seeing pressure on various fronts," said Dylan Cathers, analyst with Standard & Poor's, who has a "buy" rating on the stock with a price target of $15. "We're bullish on Windows 8," the new OS that Microsoft (Nasdaq: MSFT), the world's biggest software company, is expected to start shipping next month.

Still, HP has a nimble Chinese competitor nipping at its No. 1 status in PCs, Lenovo Group (Pink: LNVGY), which overtook Dell and reported highly profitable second-quarter results last week. HP may get a boost from Windows 8, as well as demand for new Ultrabook laptops with the new chipsets from Intel (Nasdaq: INTC), the No. 1 chipmaker.

But investors will wait to see if Whitman announces a new HP entry into the tablet sector now dominated by Apple (Nasdaq: AAPL), the world's most valuable technology company. Last year, it got in and out with the TouchPad. This month, HP registered the name Gram and is believed to be shifting its Palm unit that created TouchPad to operate under that name.

Meanwhile, HP was expected to report gains in sales of servers to enterprises, along with software and so-called middleware, as it tries to derive more revenue from higher-margin products than PCs and printers, where competition from Chinese manufacturers headed by Lenovo is blistering. Server sales fell slightly as did services, but software sales gained nearly 20 percent and earnings in that category rose nearly 10 percent.

HP shares closed at $19.20, down 73 cents, or nearly 4 percent, in Wednesday trading, giving it a market capitalization of $37.8 billion. Shares have fallen nearly 26 percent this year and nearly 22 percent in the past 52 weeks.

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