HP's Q1 beats estimates as PC business surprises

The PC business didn't suck nearly as bad as feared, and Hewlett-Packard's first quarter benefits. The company sees strong enterprise demand for PCs as Windows XP systems are tossed.

Sarah Tew/CNET

Hewlett-Packard reported better-than-expected first quarter earnings and revenue as the PC business delivered sales growth amid enterprise demand.

The company reported first quarter earnings of $1.4 billion, or 74 cents a share, on revenue of $28.2 billion, down 1 percent from a year ago. On a constant currency basis, HP's revenue was up slightly. Non-GAAP earnings for the first quarter was 90 cents a share.

Wall Street was looking for first quarter earnings of 84 cents a share on revenue of $27.2 billion.

As for the outlook, HP said that it expects to report second quarter non-GAAP earnings of 85 cents a share to 89 cents a share. Wall Street was looking for second quarter earnings of 89 cents a share. For 2014, HP projected non-GAAP earnings of $3.60 to $3.75 a share compared to Wall Street estimates of $3.67 a share.

CEO Meg Whitman said that HP's restructuring was largely complete just as rivals were "confronting new challenges." Look for HP to argue that Lenovo will have integration challenges with integrating IBM's x86 server business and note IBM's retooling.

HP

The biggest surprise for HP was the PC business. Personal systems revenue was up 4 percent in the second quarter with commercial sales growing 8 percent. Consumer PC sales fell 3 percent.

HP

HP's printing business was also strong with operating margins of 16.8 percent as revenue fell 2 percent. The enterprise unit saw revenue growth of 1 percent with industry standard server sales growing 6 percent.

Enterprise services revenue, which was supposed to be decent, was down 7 percent. Software revenue fell 4 percent.

HP
HP
HP

This story originally appeared as "HP's Q1 stronger than expected as PC business surprises" on ZDNet.

About the author

    Larry Dignan is editor in chief of ZDNet and editorial director of CNET's TechRepublic. He has covered the technology and financial-services industries since 1995.

     

    Join the discussion

    Conversation powered by Livefyre

    Show Comments Hide Comments
    Latest Galleries from CNET
    ZTE's wallet-friendly Grand X (pictures)
    Lenovo reprises clever design for the Yoga Tablet 2 (Pictures)
    Top-rated reviews of the week (pictures)
    Best iPhone 6 and iPhone 6 Plus cases
    Make your own 'Star Wars' snowflakes (pictures)
    Bento boxes and gear for hungry geeks (pictures)