HP chief aims to steady turnround

Hewlett-Packard chief executive Meg Whitman is benefiting from a surge in PC sales. Now she needs to show she can make progress in other businesses, including software and services.

HP chief aims to steady turnround

The technology provider posted its first sales growth in 12 quarters, with revenue rising 1.3% to $27.6bn (€20.7bn) for the fiscal third quarter ended July 31. Profit excluding certain items was 89 cents.

Yet even as HP’s personal-computing business experienced a 12% revenue jump for the quarter, sales across the company’s other divisions — including services, printers and software — either declined or clocked in at less than 2% growth. The uneven results illustrate the challenges Whitman still faces in turning around the technology giant, even after moving to rev up growth with new products and cutting jobs to trim costs since she took over as CEO in September 2011.

Whitman said HP has become a stronger company because it has been forged in “the adversity of the turnaround”, but she acknowledged there are some declining and flat businesses, and said there were opportunities for growth, especially in PCs.

Whitman has stabilised HP and returned the company to profit over her tenure. She has focused on reducing costs and introducing new products such as water-cooled servers and 3D printers. In May, she said she was cutting as many as 16,000 more employees, on top of 34,000 already announced.

Sustained sales growth remains elusive. HP 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, HP’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.

Net income for the quarter fell 29% to $985m, or 52 cents a share, compared with $1.39bn, or 71 cents, a year earlier. The company took a $649m restructuring charge in the quarter.

For the current quarter, HP 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.

— Bloomberg

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