HP reins in revenue slide as turnaround progresses
By Edwin Chan
SAN FRANCISCO (Reuters) - Hewlett Packard Co's revenue fell less than Wall Street expected in the first quarter and it raised its outlook for fiscal 2014 earnings as the computing giant grew sales at its two largest businesses and again signaled a better year ahead.
In the midst of a multi-year turnaround effort intended to revive growth, the Silicon Valley company is trying to reduce its reliance on personal computers and move toward computing equipment and networking gear for enterprises.
On Thursday, the company broke its losing streak in its PC-focused personal system group with a 4 percent gain in revenue. Chief Executive Office Meg Whitman told analysts that the company saw corporations and agencies beginning to replace ageing computers in the quarter, while Microsoft's decision to soon end support for its Windows XP operating system also prompted PC upgrades.
Business at its enterprise group, the lynchpin of HP's strategy to transform itself into an IBM-like provider of enterprise computing services, edged 1 percent higher as server sales fared better than analysts had expected. Chief Executive Officer Meg Whitman said growth in revenue and operating margins in that crucial division was "possible," provided demand from enterprises holds up.
Whitman, who took the helm of the HP more than a year ago, has said she expects revenue to stabilize in 2014, with some areas of growth for the company.
On Thursday, Whitman stuck to that outlook and told Reuters she was upbeat on HP's European business as the developed part of that region stabilized, and she said she saw strength in emerging markets like India and Mexico. She added that HP's business in China stayed largely flat, better than competitors had fared.
"Pleased with the progress, more work to be done," Whitman summarized for Reuters in an interview.
"It's a battle. It's a knife fight every single day out there, but we feel we've got the right ammunition," she told analysts later. Continued...