HP Beats on Revenue, Earnings, Sees PC Refresh
This story has been updated from 5:48 PM EST with additoinal conference call comments on PC sales and IBM, as well as the company's latest share price data.
NEW YORK ( TheStreet) - HP
The PC maker, which is in the throes of a massive corporate overhaul, reported sales of $28.2 billion, down slightly from $28.4 billion in the same period last year. Analysts surveyed by Thomson Reuters were looking for sales of $27.191 billion.
Excluding items, HP earned 90 cents a share, a significant hike from 82 cents a share in the prior year's quarter and above Wall Street's forecast of 84 cents a share.
"HP is in a stronger position today than we've been in quite some time," said Whitman, in a statement. "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. 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."
HP's non-GAAP operating margin was 8.5%, up from 7.9% in the year-ago quarter, but down sequentially from 9% in the fourth quarter.
For the second quarter, HP expects earnings between 85 cents and 89 cents a share, at the low end of Wall Street's 89 cents estimate. For fiscal 2014, the Palo Alto, Calif.-based firm predicts earnings between $3.60 and $3.75 a share, narrower than its previous guidance of $3.55 to $3.75. Analysts are looking for fiscal year earnings of $3.67 a share.
Revenue from the company's Personal Systems group was up 4% year over year, while its printing revenue slipped 2% over the same period. Enterprise Group revenue was up 1%, with Enterprise Services and Software down, respectively, 7% and 4%. HP Financial Services revenue was down 9%.
Speaking during the earnings call, Whitman noted an improvement in the PC market. "Overall, the PC market contraction is slowing, and we see signs of stabilization, particularly in the commercial segment," she said.
The CEO singled out HP's Personal Systems Group as one of the first quarter's highlights. "What most people will be surprised about on this earnings call will be how well PSG did," she said. Whitman pointed, in particular, to "a tailwind" in users' migration from XP to the latest versions of Windows, and a "long overdue" PC refresh. Employees, according to the HP chief, are asking not only for the latest tablets, but also new PCs.