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HP sees recovery after painful cuts

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Hewlett-Packard said Thursday its latest earnings report shows it is on a recovery path after two years of difficult restructuring moves. 

Hewlett-Packard said Thursday its latest earnings report shows it is on a recovery path after two years of difficult restructuring moves.

But initial market reaction was lukewarm after the US computer giant reported profits rose 16 percent in the past fiscal quarter to $1.4 billion.

Revenues were down just one percent at $28.2 billion, despite the horrific slump in the personal computer market, which is still one of HP's key segments.

In after-hours trades, HP shares were little changed after the report, which included upgraded guidance that fell somewhat short of analysts' expectations.

But company president and chief executive Meg Whitman said the past two years of deep job cuts and other organizational changes are finally starting to pay off.

"HP is in a stronger position today than we've been in quite some time," she said.

"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 saw some progress in the computer business as well as some other segments, such as enterprise servers.

The "personal systems" division that includes PCs had revenue gains of four percent from the previous year, as a boost in business PC sales offset weakness in the consumer sector.

Total PC unit sales were up six percent, with desktops down three percent and notebook sales up five percent, HP said.

Amit Daryanani at RBC Capital Markets said it was a "solid quarter" for HP.

Under Whitman, HP has shaken up its executive leadership team as part of an effort to regain its footing on a computing landscape being transformed by the popularity of smartphones and tablets.

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