Thu, Nov 28, 2013 - Page 15 News List

HP’s sales exceed analyst forecasts

Bloomberg

Hewlett-Packard (HP) Co reported fiscal fourth-quarter revenue and profit that topped analysts’ estimates, boosted by corporate demand for servers, personal computers and networking equipment.

The shares jumped in extended trading after the company said in a statement on Tuesday that revenue for the period ended Oct. 31 was US$29.1 billion. That exceeded the US$27.8 billion average estimate of analysts, according to data compiled by Bloomberg. Profit excluding some items was US$1.01 a share, compared with the US$1 average estimate.

Chief executive officer Meg Whitman, in her third year at the helm, is cutting costs and rebuilding relationships with customers and resellers to move past a period when the company churned through three CEOs and lost share in many of its key markets. Business demand for PCs has helped offset a global slump, while Whitman renewed product development in areas including printers and computer servers.

“The enterprise PC market seems to be stabilizing and Meg’s made progress,” Robert W. Baird & Co analyst Jayson Noland, who has the equivalent of a hold rating on the stock, said in an interview.

“She’s picked morale up from a low point under Leo,” he said, referring to former CEO Leo Apotheker, who was ousted in 2011 in favor of Whitman.

The shares of the Palo Alto, California-based company rose as much as 8.3 percent in extended trading to US$27.17 after closing down less than 1 percent at US$25.09 in New York on Tuesday.

Net income was US$1.41 billion, or US$0.73 a share, compared with a US$6.85 billion loss, or US$3.49 a share, in the fourth quarter of last year. Revenue in the same period a year earlier was US$29.96 billion. Cash flow from operations increased 10 percent.

A year ago at this time, the company disclosed an investigation into accounting fraud at its Autonomy software unit, which it had bought for US$10.3 billion. Hewlett-Packard took an US$8.8 billion writedown on the acquisition.

Profit excluding some items will be US$0.82 to US$0.86 a share for the current period, compared with the average US$0.85 estimate, according to Bloomberg data.

In the fourth quarter, revenue in the company’s enterprise group — which includes servers, storage and networking gear — rose 1.8 percent from a year earlier. There were a few other pockets of growth, including commercial PCs, where revenue increased 4 percent. Sales declined in most other businesses, such as consumer PCs, printers, software and enterprise services.

Corporations are spending more on technology, with companies upgrading to PCs that have Microsoft Corp’s newer Windows operating systems and away from Windows XP, Noland said.

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