Tech giant Hewlett-Packard reported better than expected earnings today, beating expectations despite a tough world economy and fierce competition.
The report for the fourth fiscal quarter ended Oct. 31 was the first since Meg Whitman took over as chief executive of the technology industry giant in September.|
HP reported non-GAAP earnings of $1.17 a share on revenue of $32.3 billion, compared with $1.33 a share and revenue of $33.3 billion a year ago.
“HP has a great opportunity to build on our strong hardware, software, and services franchises with leading market positions, customer relationships, and intellectual property,” Whitman said in a statement. “We need to get back to the business fundamentals in fiscal 2012, including making prudent investments in the business and driving more consistent execution.”
Analysts expected HP to post non-GAAP adjusted earnings of $1.13 a share on revenue of $32.05 billion. HP’s stock is rising in after-hours trading. The stock closed at $26.86 a share today and it is now up 2.3 percent to $27.49 a share.
For the fiscal year, non-GAAP earnings per share were $4.88 a share on revenue of $127.4 billion. On a GAAP basis, fiscal year 2011 revenue was $127.2 billion and net income was $3.32 a share.
Whitman wasn’t CEO for the entire quarter ended Oct. 31, so she won’t be entirely responsible for the company’s earnings performance. Leo Apotheker preceded Whitman in the top job but he was fired in September as the board lost confidence in his ability to communicate HP’s strategy.
Since taking over, Whitman announced on Oct. 27 that she was reversing Apotheker’s plan to sell or spin out the personal computer division. Whitman is expected to offer some guidance for HP’s expected performance in the coming fiscal year.
HP’s market capitalization is a weak $53 billion these days. By comparison Apple is worth $343.3 billion, Intel is worth $119.7 billion, and Microsoft is worth $210.1 billion.
HP said its outlook for the first fiscal quarter ending Dec. 31 is for non-GAAP earnings of 83 cents to 86 cents a share. For the full fiscal year 2012, HP expects non-GAAP earnings of $4 a share, far short of analysts expectations. For the fiscal year 2012, analysts expected earnings of $4.56 a share on revenue of $127 billion in revenue.
HP said that its services business grew 2 percent to $9.3 billion on a 12.8 percent operating margin. Enterprise servers, storage and networking fell 4 percent in the quarter compared to a year ago, with a 13 percent operating margin. Business critical systems in particular, such as the old Tandem business, was down 23 percent in the quarter.
HP Software grew 28 percent with a 27.7 percent operating margin. Personal Systems (PC hardware) sales fell 2 percent with a 5.7 percent operating margin. The Imaging and Printing Group saw revenue fall 10 percent with a 12.8 percent operating margin. Financial services revenue grew 18 percent, with a 10.3 percent operating margin.