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."
"The turnaround is on track, and we did better than we expected that we would," she told analysts on a conference call after HP reported its quarterly results. "The patient showed some signs of improvement, and I think we should be encouraged."
Whitman also said reiterated that HP has no plans for a break-up of the company and the PC business is one that the company needs to be in, but it needs to "reallocate resources from the core PC business to mobile" and other services.
HP's 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. Continued...