HP forecast beats Street, CEO says overhaul taking hold
By Poornima Gupta
SAN FRANCISCO (Reuters) - Hewlett-Packard Co's quarterly revenue and forecasts beat Wall Street expectations as it continued to cut costs under CEO Meg Whitman's turnaround plan, sending the No. 1 personal computer maker's shares up over 5 percent.
Whitman, who took the helm over a year ago after a failed bid to become governor of California, has launched a years-long turnaround to recapture some of the Silicon Valley icon's former growth trajectory.
She said on Thursday the company's efforts were gaining traction but "there's still a lot of work to do to generate the kind of growth we want to see."
HP reported that fiscal first-quarter revenue shrank 6 percent to $28.4 billion in a flat to shrinking personal computing market, but it beat the $27.8 billion Wall Street analysts had expected on average.
Net income fell 16 percent to $1.23 billion, or 63 cents a share, from $1.47 billion, or 73 cents a share, a year earlier.
HP is struggling to shore up its credibility on Wall Street while battling shrinking margins in an increasingly cut-throat PC market and cautious corporate IT spending. Like Dell Inc, HP is also struggling to sustain sales growth as smartphones and tablets surge in popularity.
Underscoring the severity of the industry's woes, Dell on Tuesday reported a 31 percent drop in profit as sales fell in virtually every major business division. CEO Whitman in October had warned of a tough 2013, with earnings set to decline steeply.
REVENUE DOWN ACROSS BUSINESS LINES Continued...