Hewlett-Packard reported fiscal fourth-quarter revenue and profit that topped analysts’ estimates, boosted by corporate demand for servers, computers and networking equipment. Revenue was $29.1 billion, compared with the $27.8 billion average estimate of analysts, the company said.
Chief executive Meg Whitman, in her third year at the helm, is cutting costs and rebuilding relationships with customers and resellers to move past a slump in which the company churned through three chief executives and lost share in almost all 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 stabilising and Meg's made progress," Jayson Noland, an analyst at Robert W. Baird and Co said in an interview. "She's picked morale up from a low point under Leo," he said, referring to former chief executive Leo Apotheker, who was ousted in 2011 in favour of Watchman.
The shares for the company rose in late trading after closing down less than 1 per cent at $25.16 in New York.
Net income was $1.41 billion, or 73 cents a share, compared with a $6.85 billion loss, or $3.49 a share, in the fourth quarter of last year. A year ago at this time, the company disclosed an investigation into accounting fraud at its Autonomy software unit, which it had bought for $10.3 billion.
Hewlett-Packard took an $8.8 billion writedown on the acquisition. Profit excluding some items will be 82 cents to 86 cents a share for the current period, compared with the average 85-cent estimate.
Ms Whitman made her forecast even as the coming year has been a moving target. The chief executive had initially said revenue would rise in fiscal 2014 as PC sales stabilised, then scrapped that prediction in August amid a prolonged PC slump and weak demand for data-centre equipment and services. Last month at a meeting with analysts in San José, California, she said the year-over-year sales decline would moderate after this year.
Hewlett-Packard's earnings report follows tepid results from enterprise computing suppliers including Cisco Systems and IBM. Cisco on November 13th forecast its first quarterly sales decline in four years as the networking equipment maker cited slower spending by phone companies and large corporations. Last month IBM said it added $15 billion to its stock buyback plan after a sixth straight quarter of declining sales.
Ms Whitman has rewarded shareholders who held on the past few years. The company said at the October 9th analyst meeting that at least 50 per cent of its free cash flow will be returned to shareholders via dividends and buybacks in 2014.
Ms Whitman is trying to make the most of a technology behemoth that sells everything from PCs and home printers to the servers, networking gear and software that power corporate data centres. Hewlett-Packard is behind in mobile computing, where tastes are shifting from notebooks to tablet computers and smartphones, and is competing with healthier rivals including Apple and Samsung. In the corporate computing market, Hewlett-Packard is squaring off against Cisco, EMC, Oracle, IBM and Dell, which last month went private in a $24.9 billion leveraged buyout by its founder. - (Bloomberg)
