By Anna Prior
Hewlett-Packard Co. said its fiscal second-quarter profit rose
18%, but the computer maker recorded another quarter of lower
revenue and said it plans to increase the number of eliminated
positions as part of a restructuring program.
The company said total revenue for the second quarter ended
April 30 fell 1% to $27.31 billion, below the $27.41 billion
projection by analysts polled by Thomson Reuters. The top line was
flat on a constant-currency basis.
H-P also said it plans to increase the number of eliminated
positions by between 11,000 to 16,000 as part of a restructuring
program adopted in 2012. The company had previously estimated that
34,000 positions would be eliminated.
"With the first half of our fiscal year completed, I'm pleased
to report that H-P's turnaround remains on track," President and
Chief Executive Meg Whitman said in a news release.
Shares, which recently touched a 52-week high of $33.90 in early
April, fell 0.9% to $31.50 in after-hours trading. The stock had
slipped into the red near the end of the trading day after some of
the company's results were released early.
Though considered a pioneer in business computing, H-P in recent
years has struggled to manage the shift to mobile devices and the
growing demand for cloud computing systems, where customers rent
computing power instead of buying and running their own
systems.
But while other companies like International Business Machines
Corp. are retreating from the low margins and intense pricing
pressure of the hardware market, H-P has doubled-down on hardware
by moving to bolster its computing hardware business.
On Thursday, the company said revenue for its enterprise group,
which sells computer servers and other hardware, slipped 2% to
$6.66 billion in the second quarter, a reversal after the company
recorded two consecutive quarters of growth after two years of
declines.
Overall, H-P reported a profit of $1.27 billion, or 66 cents a
share, up from $1.08 billion, or 55 cents a share, a year earlier.
Excluding restructuring charges and other items, adjusted profit
rose to 88 cents from 87 cents a share.
In February, H-P had projected an adjusted profit between 85
cents to 89 cents a share. The top end of the range was in-line
with Wall Street's estimates at the time.
H-P's personal-systems unit's revenue rose 7%, as commercial
revenue increased 12% and consumer revenue declined 2%. Total unit
shipments were up 10%, as H-P shipped more notebooks and
desktops.
Printing revenue declined 4%. Enterprise services--which sells
corporate-technology consulting, computer security and other
corporate-tech services, reported a 7% decline in revenue. The top
line was flat for software.
Looking into the fiscal third quarter, the company sees adjusted
profit between 86 cents to 90 cents a share, compared with Wall
Street's estimate of 89 cents.
For the full year, H-P raised the bottom end of the view by
three cents a share, and now sees a per-share profit between $3.63
and $3.75.
Write to Anna Prior at anna.prior@wsj.com
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