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HP reports 1pc dip in first quarter revenue but raises outlook

February 20, 2014

WASHINGTON - Technology giant Hewlett Packard Co's raised its outlook for fiscal 2014 earnings Thursday while reporting 1 percent dip in first quarter net revenue to $28.2 billion, compared to the corresponding quarter in the previous year, and flat on a constant currency basis.

HP raised the lower end of its full-year earnings outlook slightly, to $3.60 to $3.75 versus a previous forecast for $3.55 to $3.75.

The company posted a 16 percent rise net earnings of $1.4 billion in the first quarter, compared to $1.2 billion a year ago.

In the midst of a multi-year turnaround effort intended to revive growth through reduced reliance on personal computers for growth, HP reported 4 percent year on year rise in revenue in the personal computer segment, with a 3.3 percent rise in operating margin.

While commercial revenue increased 8 percent, the consumer revenue declined 3 percent.

Sales of computer units altogether rose 6 percent with Notebooks sales recording 5 percent growth while desktop sales dipped 3 percent.

The Silicon Valley company reported that its printing revenue was down 2 percent year over year with a 16.8 percent operating margin. Total hardware units were up 5 percent with commercial hardware units rising 6 percent and consumer hardware units edging up 4 percent. Supplies revenue was however down 3 percent.

Overall the first quarter non-GAAP diluted net earnings per share of $0.90, was a 10 percent rise from the prior-year period, and an improvement on the previously provided outlook of $0.82 to $0.86 per share

Shares of HP gained a penny to $30.20 after hours, from a close of $30.19 on the New York Stock Exchange.

The company statement issued Thursday revealed that the first quarter GAAP diluted net earnings per share of $0.74, was a 17percent jump from the prior-year period, and an improvement on the previously provided outlook of $0.60 to $0.64 per share

Chief Executive Officer Meg Whitman, who took the helm of the world's largest PC maker more than a year ago, projected some areas of innovation led growth this year while expressing expectations of the revenue stabilizing this year.

"HP is in a stronger position today than we've been in quite some time. The progress we're making is reflected in growth across several parts of our portfolio, the growing strength of our balance sheet, and the strong support we're receiving from customers and channel partners," said Whitman.

"Innovation is igniting our comeback, and at a time when many of our competitors are confronting new challenges, two years of turnaround work is setting us up for an exciting future."

In an interview, Whitman told Reuters she was upbeat on their European business as the developed part of that region stabilized, and saw strength in emerging markets like India and Mexico.

She added that HP's business in China stayed largely flat, better than competitors had fared.

"Pleased with the progress, more work to be done," Whitman summarized for Reuters.

Investors have been cautious on the outlook for computing companies after IBM posted disappointing results, in part because of slowing corporate and emerging markets demand. There has also been some backlash on charges of US spying.

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Source: Big News Network (United Arab Emirates)

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