Hewlett-Packard reports $1.2 billion profit

PanARMENIAN.Net - Hewlett-Packard Co. reported earnings for its fiscal first-quarter Thursday, Feb 21 that sailed past analyst estimates despite shrinking revenue, Los Angeles Times reports.

The results were some much-needed good news for a company that has drawn criticism on Wall Street because of its recent performance. During the previous two quarters, HP announced losses totaling $15.3 billion as the company suffered write-downs on a few ill-fated acquisitions.

Meg Whitman, the tech giant's chief executive, said the quarter was "better than expected" but also acknowledged that plenty of work remains to reach the goal of returning HP to being a growth company.

"We did better than we expected on the bottom line," Whitman told The Times. "We still see declining sales, which is something we want to fix. We're on it. We've got a plan."

HP posted a profit of $1.2 billion, or 63 cents a share, for the last three months of 2012. That was a 16% drop from the year-ago period when the company reported a profit of 73 cents a share.

Highlighting the magnitude of the challenges, all but one segment of HP's business saw revenue decline in the first quarter from the same period a year ago: personal systems group revenue fell 8%; printing fell 5%; enterprise group fell 4%; enterprise services fell 7% and software fell 2%. Only financial services saw an increase, of 1%.

Whitman shared that optimism about the progress being made in her long-term turnaround plan. She has said in the past the company probably wouldn't start to see revenue growth until 2014.

"I actually think part of what we've being doing is starting to pay dividends," she said. "I think we've got the best product lineup we've had across the business units in a decade."

In the wake of rival Dell's buyout announcement and its recent weak earnings, Whitman remained confident that HP's Personal Systems Group, which includes PC sales, has a strong future.

Whitman said Dell appeared to be pursuing a strategy of commoditization, making the lowest cost machines possible. By contrast, she said HP is attempting to rethink features and design, to make distinctive gadgets that could deliver higher margins and revenues.

Whitman said the company continues to broaden its definition of PSG to include all computing platforms, including tablets and eventually smartphones. HP has recently announced plans to move beyond Microsoft's Windows to make devices based on Google's Chrome operating system. As of now, the company had no further updates regarding when it might return to making smartphones.