HP Q1 Revenue, Earnings Fall, But Prospects Grow On Channel Strengths

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Hewlett-Packard on Thursday reported that first fiscal quarter 2013 revenue and earnings were down compared to last year, but investors liked what they heard and drove up HP shares in aftermarket training.

HP's first fiscal quarter results were better than expected, while the company gave a new outlook for the second quarter that was better than originally expected, giving hope that the company is on the way to turning its business around.

HP president and CEO Meg Whitman also gave kudos to the channel during the company's financial analyst conference call and said HP is making significant investments in the channel to strengthen that part of the business.


[Related: HP's Whitman Lays Down The Channel Law]

HP reported revenue for the first fiscal quarter of 2013 of $28.4 billion, down 6 percent from the $30.0 billion the company reported for the first quarter of 2012.

Revenue from HP's America's business fell 3 percent compared to last year.

GAAP earnings for the quarter were $1.2 billion, or 63 cents per share, down 16 percent from the $1.5 billion the company reported last year. Non-GAAP earnings were reported as $1.6 billion, or 82 cents per share, down 12 percent compared to last year's $1.8 billion, or 92 cents per share.

Fiscal year 2013 is the second year in HP's plan to turn its business around, Whitman said on the conference call.

"I called 2013 as a fix and rebuild year. ... With the first quarter 2013 behind us, we can see some traction as we rebuild for the future," she said.

Investors were excited by the results, driving HP shares up 6 percent just minutes after the results were announced. Three hours later, shares were still up well over 5 percent.

Whitman said during her prepared remarks that HP has made significant investment in the channel during the quarter, including some changes announced this week at HP Global Partner Conference, such as simplified rebates, higher designation of partner levels and more marketing funds for partners.

"I can tell you, we were very excited by what we saw [at the conference]," she said.

NEXT: PC Business Hurting

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