HP shows progress as profit outlook tops estimates

, Bloomberg

   |0 Comments

Hewlett-Packard Co., the largest personal-computer maker, forecast fiscal second-quarter profit that exceeded analysts' estimates, helped by cost-cutting measures and a smaller-than-projected drop in service sales.

Profit, excluding some items, will be 80 cents to 82 cents a share for the current quarter, which ends in April, the Palo Alto, California-based company said Thursday. That beat analysts' average 77-cent estimate, according to data compiled by Bloomberg. The shares rose the most in more than a year.

Hewlett-Packard is using job cuts to bolster profit as demand for printers and personal computers slumps and companies curtail purchases of higher-margin hardware and software. Chief executive officer Meg Whitman said she feels "pretty good" about fiscal 2013 and reaffirmed a prediction that the company will resume growth next year, evidence of progress on a five-year turnaround plan even as competitive pressures linger.

"They seem to be managing the restructuring better than we had expected — it's still a work in progress," said Shannon Cross, an analyst at Cross Research, based in Livingston, New Jersey.

Fiscal first-quarter revenue fell 5.6 percent to $28.4 billion, compared with analysts' average estimate of $27.8 billion. Profit, excluding amortization, restructuring and other charges, was 82 cents a share, compared with the 71-cent prediction. Net income fell 16 percent to $1.23 billion, or 63 cents a share, from $1.47 billion, or 73 cents, a year earlier.

"I feel pretty good about the rest of the year," Whitman said in an interview. "I think we are beyond the announcements about the writedowns and restructuring."

What's being said

Comments are not moderated. To report offensive comments, click here.

Preparing comment abuse report for Article# 1202589229748

Thank you!

This article's comments will be reviewed.