Hewlett-Packard reported better than expected fourth quarter results and indicated that its turnaround plans are progressing.
The company reported a fourth quarter profit of $1.4 billion, or 73 cents a share, on revenue of $29.1 billion, down 3 percent from the same quarter a year ago. Non-GAAP earnings for the fourth quarter were $1.01 a share. Wall Street was looking for HP to deliver fourth quarter non-GAAP earnings of $1 a share on revenue of $27.9 billion.
As for the outlook, HP projected first quarter earnings to be 82 cents a share to 86 cents a share on a non-GAAP basis. Wall Street was looking for 85 cents a share. For fiscal 2014, HP projected non-GAAP earnings to be $3.55 to $3.75 a share. That outlook was in line with its previous estimates. Wall Street expects $3.65.
In a nutshell, HP CEO Meg Whitman has managed to make HP more efficient. The company's key units with the exception of enterprise all saw revenue declines.
A few key points worth noting:
The company reported fiscal 2013 earnings of $5.1 billion, or $2.62 a share, on revenue of $112.3 billion, down 7 percent from a year ago.
HP said that it cut its net debt position by $1.3 billion. HP ended the year with $12.16 billion in cash and equivalents and long term debt of $16.6 billion.
The company spent $3.13 billion on research and development for the year ended Oct. 31. That sum accounts to 2.5 percent of revenue.
This chart unfolds HP's various units. The key points:
x86 servers sold well in the fourth quarter.
Commercial printers fared well as did consumer. Notebooks and desktops were off from a year ago.
"Other" in the personal systems group, most likely tablets, saw growth of 23 percent in the fourth quarter off of a small base.
HP's software business took a hit as sales fell 9 percent in the fourth quarter.
Here's a look at the key charts from HP's presentation. All regions saw revenue declines in the fourth quarter.
HP is seeing some slight growth for commercial PC sales, but consumer revenue fell 10 percent.
Storage and networking revenue was up slightly in the fourth quarter. Converged infrastructure has a better growth rate.
HP's software group is a disappointment no matter how you slice it. Licensing revenue took a hit in the fourth quarter.