HP third-quarter profit down 29%per cent
21 Aug 2014
Hewlett-Packard Co said its fiscal third-quarter profit was down 29 per cent. However, the computer make saw a surprising increase in revenue, driven by increased shipments of notebooks and desktops.
According to the Silicon Valley giant, revenue for the quarter ended 31 July rose 1.3 per cent to $27.59 billion. The top line was up 1 per cent on a constant-currency basis.
HP, strongly associated with personal computers, server systems and printers, had faced stiff competition amid rapid technology changes.
company's lack of revenue growth, along with planned job cuts, had complicated chief Meg Whitman's efforts to revive HP as she approached her third anniversary as CEO.
The company overall posted a profit of $985 million, or 52 cents a share, down from $1.39 billion, or 71 cents a share, a year earlier. Excluding restructuring charges and other items, the profit increased to 89 cents a share from 86 cents a share.
The company, in May had projected an adjusted profit between 86 cents to 90 cents a share.
Wall Street had given a thumbs up to Whitman for her ability to churn cash from HP's operations, which included paring of costs. The cost cutting plans included an announcement in May to slice up to 16,000 jobs, on top of 34,000 positions HP earlier said it would cut as part of Whitman's five-year turnaround plan.
Meanwhile, Bloomberg reported Whitman was benefiting from a surge in personal-computer sales and now needed to show she could make progress in other businesses, including software and services.
However, even as the company's personal-computing business experienced a 12 per cent revenue jump for the quarter, sales across the company's other divisions -- including services, printers and software – slowed or delivered less than 2 per cent growth.
The uneven results illustrated the challenges Whitman still faced in the technology giant around, even taking steps to spur growth with new products and cutting jobs to cut costs after she took over as CEO in September 2011.
Bloomberg quoted Bill Kreher, an analyst at Edward Jones, who has a hold rating on the stock as saying the company was in this longer-term shift toward services and software and neither of those divisions grew, which was not necessarily consistent with the long-term plan.
aIn a conference call, Whitman said HP had become a stronger company as it had been forged in ''the adversity of the turnaround.''
