Tags: H-P | Hewlett | Revenue | PC

H-P Posts Surprise Revenue Gain as PC Sales Climb

Wednesday, 20 Aug 2014 05:40 PM

Hewlett-Packard Co. posted a surprise increase in quarterly revenue after sales from its personal computer division climbed 12 percent, but a flat to declining performance from its other units underscored the company's uphill battle to revive growth.

HP sales rose 1 percent to $27.6 billion in its fiscal third quarter from $27.2 billion a year earlier. Wall Street analysts, on average, had forecast a modest drop in revenue to $27.01 billion.

The Silicon Valley giant is undergoing a major overhaul aimed at cutting costs and re-orienting itself toward higher-margin businesses such as computing infrastructure. It's trying to reduce a reliance on PCs and move toward servers, storage and networking for enterprises — part of Chief Executive Officer Meg Whitman's effort to return the sprawling company to growth.

Whitman credited personal computer demand for "coming back some" as consumers and corporations upgrade aging machines. She was also pleased with 2 percent growth in revenue to $6.9 billion at the Enterprise Group, the company's second-largest business that deals in networking, storage and servers for corporate clients.

"It's a turnaround in a declining business," Whitman said in an interview. She singled out a 9 percent increase in sales of industry-standard servers in particular, saying uncertainty around Lenovo's acquisition of IBM Corp's low-end server unit helped steer business to HP.

"We've been able to capitalize on that uncertainty and our win rates are up against IBM," Whitman added.

For now, HP is keen on boosting its profitability.

In May, it estimated another 11,000 to 16,000 more jobs needed to be cut on top of 34,000 previously announced. That took the grand total under Whitman's restructuring, which began with her ascension to the post in 2011, to as much as 50,000.

On Wednesday, HP narrowed its earnings forecast for the full year to $3.70 to $3.74 per share, from $3.63 to $3.75 previously. Shares of the company dipped 0.8 percent to $34.84 after-hours. They closed at $35.12 on the New York Stock Exchange.

It posted $1.7 billion or 89 cents per share of non-gaap diluted net earnings, up 3 percent and in line with average forecasts, according to Thomson Reuters I/B/E/S.

Whitman said HP was assessing its $4 billion software business in view of an industry migration toward Internet-based or cloud software. And she said the company, with $4.7 billion in net cash, could effect acquisitions if needed.

"We're in a position to make acquisitions the way we weren't over the past year," she said.

© 2017 Thomson/Reuters. All rights reserved.

   
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Hewlett-Packard Co.posted a surprise increase in quarterly revenue after sales from its personal computer division climbed 12 percent, but a flat to declining performance from its other units underscored the company's uphill battle to revive growth.
H-P, Hewlett, Revenue, PC
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2014-40-20
Wednesday, 20 Aug 2014 05:40 PM
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