Meg Whitman buys more time as HP beats earnings estimates

Hewlett-Packard reported earnings that beat Wall Street’s earnings expectations.

Analysts had expected a big drop in quarterly revenue, but HP exceeded estimates on both profits and revenues. HP reported earnings per share of 90 cents on revenue of $28.2 billion. It also raised its earnings estimates for the fiscal year. That should buy some time for Meg Whitman, chief executive of HP, as she seeks innovative new technologies to turn HP around.

On recent earnings calls, Whitman has said that it would take until 2015 or 2016 to turn around HP.

Analysts had expected HP to report a profit of 86 cents a share on revenues of $27.2 billion for the fiscal first quarter ended Jan. 31. A year earlier, HP had reported a profit of 82 cents a share on revenue of $28.36 billion. (All figures are on a non-GAAP basis, which analysts use to determine whether a company hits or misses its targets).

HP did report better-than-expected earnings in November for its fiscal year end, and that helped drive the stock up 5 percent year-to-date.

As an aside, speculators have been fixated on what HP, the world’s largest maker of printers, could do in the 3D printing market. So far, chief executive Meg Whitman has only promised that HP is watching the market closely and will have something to offer in the market since it is adjacent to HP’s strong market for printers. Meanwhile, HP’s core market of making PCs and the printers that go with them is hurting.

Of course, 3D printing, while interesting, will likely have very little impact on HP’s bottom line for a long time to come. In the meantime, the PC market has been getting weaker as smartphones and tablets take off. HP recently launched an Android-based “phablet,” or half phone, half tablet, in the Indian market.

HP also raised its earnings guidance, saying it would now report fiscal year 2014 earnings of $3.60 to $3.75 a share.

In the first fiscal quarter, HP’s PC group saw revenues rise 4 percent from a year ago. Printing was down 2 percent, enterprise was up 1 percent, enterprise services was down 7 percent, software was down 4 percent, and financial services was down 9 percent. Overall, revenue was down 1 percent and earnings were up 9 percent in the first fiscal quarter.

Whitman said in a statement that HP was in a stronger position than it had been for some time. She said HP was making progress across several parts of its portfolio, and that “two years of turnaround work is setting us up for an exciting future.”