Hewlett-Packard Co. (NYSE: HPQ) posted a surprise increase in quarterly revenue after sales from its personal computer division climbed 12 percent, but a flat to declining performance from its other units underscored the company's uphill battle to revive growth.
HP sales rose a mere 1% to $27.6 billion U.S. in its fiscal third quarter from $27.2 billion U.S. a year earlier. Wall Street analysts had forecast a modest drop in revenue to $27.01 billion U.S..
The Silicon Valley giant is undergoing a major overhaul aimed at cutting costs and re-orienting itself toward higher-margin businesses such as computing infrastructure. It's trying to reduce a reliance on PCs and move toward servers, storage and networking for enterprises - part of Chief Executive Officer Meg Whitman's effort to return the sprawling company to growth.
Whitman credited personal computer demand for "coming back some" as consumers and corporations upgraded ageing machines. She was pleased with 2 percent growth in revenue to $6.9 billion U.S. at the Enterprise Group, the company's second-largest business that deals in networking, storage and servers.
She pegged Russia and China - countries whose relations with the United States have come under strain - as weak spots for PC sales, though Whitman said its Chinese business as a whole remained on solid footing.
HP intends to remain rigorous on costs to try and boost profitability. In May, it estimated another 11,000 to 16,000 more jobs needed to be cut on top of 34,000 previously announced.
It narrowed its earnings forecast for the full year to $3.70 to $3.74 U.S. per share, from $3.63 to $3.75 U.S. The company posted $1.7 billion U.S. or 89 cents per share of non-gaap diluted net earnings in the third quarter, up 3% and in line with forecasts.
Shares of H-P opened Thursday at $36.08 U.S. on the New York Stock Exchange, up 96 cents, or 2.7%, from Wednesday's close, within a 52-week trading range of $20.25 U.S. to $36.21 U.S.
