Hewlett-Packard Thursday showed signs that its turnaround is on track by posting better-than-expected results for its first fiscal quarter, ended Jan. 31
The computer giant reported GAAP diluted net earnings per share of 90 cents, well above the Wall Street consensus of 84 cents per share and up 10 percent from the year-ago quarter.
Bolstered by increases in sales for personal systems and industry-standard servers, HP reported sales for the quarter of $28.2 billion, above the Wall Street consensus of $27.19 billion, but down 1 percent from the prior-year period.
HP shares closed up 74 cents, or 3 percent, at $30.19 Thursday in anticipation of the strong results, just off the 52-week high of $30.28.
HP CEO Meg Whitman said the results are a sign of an HP comeback at a time when competitors are facing new challenges.
"HP is in a stronger position today than we've been in quite some time," said Whitman in a prepared statement before a scheduled conference call with financial analysts. "The progress we're making is reflected in growth across several parts of our portfolio, the growing strength of our balance sheet, and the strong support we're receiving from customers and channel partners. Innovation is igniting our comeback, and at a time when many of our competitors are confronting new challenges; two years of turnaround work is setting us up for an exciting future."
HP reported that its personal systems business overall was up 4 percent, with commercial sales up 8 percent and consumer sales down 3 percent.
HP's Enterprise Group reported a sales increase of 1 percent with industry-standard servers up 6 percent for the quarter, and networking sales up 4 percent.
HP partners say they have seen a stepped-up pace of new product innovation and a reinvigorated channel engagement in the sales trenches with the appointment of former COO Bill Veghte last August as executive vice president of the Enterprise Group and former HP Senior Vice President Dion Weisler last June as the executive vice president of the Printing and Personal Systems Group.
Kelly Ireland, founder and CEO of CB Technologies, a Westminster, Calif.-based Platinum HP Enterprise partner, said the big innovation bets made by Whitman in products like the Moonshot server and the Haven big data platform are resonating with customers and partners.
CB Technologies recognized HP revenue for the last fiscal year was up 30 percent to $96 million, and she is targeting another 30 percent growth in sales for the new fiscal year. She said CB Technologies' first-quarter HP results were off the charts with robust sales of HP hyperscale server clusters.
Ireland credited Whitman for laying out a no-nonsense five-year turnaround plan with stepped- up channel sales engagement and delivering on it every step of the way.
"Meg came in and laid out what she was going to do for the channel, and she has delivered on that promise," said Ireland. "Now it's up to solution providers to deliver growth."
Some areas that still need to show that sales growth: enterprise services sales, which were down 7 percent during the quarter with a 9 percent drop in infrastructure technology outsourcing sales; software sales, which were down 4 percent with license revenue down 6 percent; and printing sales, which were down 2 percent with a 3 percent drop in supplies sales.
One notable sign of HP's financial strength: The company generated $3 billion in cash flow from operations in the quarter, up 17 percent from the year-ago quarter.
PUBLISHED FEB. 20, 2014