HP shows progress as profit outlook tops estimates
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."