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Hewlett-Packard’s quarterly sales top estimates
San Francisco • Hewlett-Packard Co. reported fiscal third-quarter sales that topped analysts' estimates, fueled by improving personal-computer sales.
Profit excluding certain items in the period ended July 31 was 89 cents a share, with revenue rising 1.3 percent to $27.6 billion, the Palo Alto, Calif.-based company said Wednesday. Analysts on average were estimating profit of 89 cents a share and sales of $27 billion, according to data compiled by Bloomberg.
The results give Chief Executive Meg Whitman a boost as she works to turn around the world's second-biggest PC maker. Since taking over in September 2011, she has focused on reducing costs and bringing new products like water-cooled servers and 3-D printers to market. Whitman, who was recently named chairman after activist investor Ralph Whitworth stepped down for health reasons, in May said she was paring as many as 16,000 more employees, on top of 34,000 already announced.
"She's done a really good job of stabilizing a business that was spiraling out of control," said Jayson Noland, an analyst at Robert W. Baird & Co., who has the equivalent of a hold rating on the stock.
Shares declined 1 percent to $35.12 at the close in New York. The stock is up 26 percent so far this year.
Corporate spending on PCs has also helped lift the results of other technology companies recently. Intel Corp. last month forecast revenue that exceeded analysts' estimates for the current quarter, while Microsoft said it's seeing signs of improvement in the PC market. Worldwide PC shipments slipped less than projected in the second quarter as businesses replaced older computers, researcher IDC said in July.
"What we're looking at is not just a turnaround story, now we're really starting to get some hardware tailwinds," said Jeffrey Fidacaro, an analyst at Monness Crespi Hardt & Co.
Hewlett-Packard's net income for the quarter fell 29 percent to $985 million, or 52 cents a share, compared with $1.39 billion, or 71 cents, a year earlier.
For the current quarter, the company projected profit excluding items of $1.03 to $1.07, in line with analysts' average estimate of $1.05, according to data compiled by Bloomberg.
Whitman has stabilized Hewlett-Packard and returned the company to profit over her tenure. She has cut jobs several times, including the latest round announced in May. The company's workforce totaled 317,500 at the end of October.
Sustained growth remains elusive. Hewlett-Packard competes with EMC, Oracle, Dell and others, all of which are facing young competitors that are fielding cheaper and simpler technologies. One of Silicon Valley's oldest companies, Hewlett-Packard's product range spans PCs to home printers to software, yet the company has fallen behind in mobile computing at a time when consumers have migrated to smartphones and tablets made by Apple and Samsung Electronics.