HP is a little over halfway to its goal of eliminating 29,000 jobs worldwide over three years.
PAUL SAKUMA • Associated Press ,
Declaring a year for rebuilding, HP posts a lower profit
- Article by: QUENTIN HARDY
- New York Times
- February 21, 2013 - 9:06 PM
SAN FRANCISCO – Hewlett-Packard Co. might have gained running room, but it remains unclear whether it can leap successfully to technology’s new post-PC world.
The world’s largest maker of personal computers, printers and computer servers has struggled for growth in a world increasingly full of smartphones, tablets and cloud computing services. Anchored in traditional hardware, HP is challenged by new devices, which it does not make, and cutthroat competition in its old low-margin businesses.
On Thursday, HP reported lower first-quarter revenue, profit and profit margins. Sales were down in all five of HP’s major businesses, which also include software and services.
Chief Executive Meg Whitman declared in an interview after release of the results that “the patient showed improvement.” She said HP was building a number of consumer and business products, including new kinds of laptops and low-energy servers for cloud computing, that will renew the company.
Positive sustained growth, however, is still a year away, Whitman said.
“All of the pipe we laid in 2012, and will lay in 2013, will show up in 2014,” she said.
Of smartphones, perhaps the biggest missing piece of HP’s portfolio, she would say only: “We’re still working on it.”
HP said net income fell 16 percent, to $1.23 billion, or 63 cents a share, from $1.47 billion, or 73 cents, in the period a year earlier. Revenue fell 6 percent, to $28.36 billion.
The results exceeded Wall Street expectations. Using the accounting methods preferred by analysts, HP reported net income of 82 cents a share, above the predictions of 71 cents. Analysts also expected revenue of $27.8 billion, according to a survey by Thomson Reuters.
HP’s shares were up 5.85 percent in after-hours trading after the announcement. The stock had closed at $17.10, up 2.4 percent, in regular trading. Last year Whitman announced that HP would lay off 29,000 employees over three years. About 15,300 of them are already gone, she said. She ascribed the company’s better-than-expected performance to “operational efficiencies” that contributed to cash flow of $2.6 billion, a 115 percent improvement over a year earlier.
Much of that cash, she said, is going into research and development for products, like data storage that works faster and cheaper by managing workloads across several machines, and printers that can scan and search the contents of documents.
© 2013 Star Tribune