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Whitman: HP rescue package on track in Q1

Alex Scroxton

HP CEO Meg Whitman has said that customer confidence in the firm is returning as her multi-year rescue plan kicks into gear.

Taking analyst questions on a conference call to mark the close of HP’s Q1, Whitman said: “I am hearing two things from our customers. One is, tremendous increase in confidence in HP. We look like the paragon of stability right now, which is very different than it was two years ago and they have a lot of confidence in where we are headed from a product roadmap perspective.”

Whitman pointed to encouraging signs in the quarter that her efforts to get HP back on track were taking hold, notably an unexpected return to growth on Personal Systems, and revenue growth for the first time since Q2 2011, on a constant currency basis.

She also pointed to the continuing importance of HP’s partners to the overall picture, saying she hoped a number of programme enhancements that will drop at its Global Partner Conference, to be held in Las Vegas in March, would “further strengthen our channel relationships”.

Total sales at HP for the first three months of its financial year were $28.2bn, down 1% year-on-year and flat on a constant currency basis. Operational cashflow of $3bn was up 17% compared to the year-ago quarter. GAAP net profit, reported HP, rose 16% to $1.4bn.

In EMEA, sales of $10.4bn were up 1% year-on-year but down 1% in constant currency. HP said it remained cautious about the region as a whole, but indicated that its key markets were stabilising.

By business unit, HP singled out its Personal Systems segment for praise after gathering commercial strength saw sales grow 3.6% to $8.5bn. Commercial sales were up 8% while consumer dropped by 3%, but total shipments across both sides were up 6%.

“There were signs of improved market conditions, especially in commercial PCs and we are confident about our portfolio and focus,” reported CFO Cathie Lesjak. “Channel inventory levels are down and well within acceptable ranges across all categories and regions.”

Elsewhere, Printing sales dropped 2% driven by declining supplies sales, although hardware units were up in both commercial and consumer segments.

Enterprise Group sales dropped 1%, with declines of 25% on Business Critical Systems and 4% on Technology Services failing to offset growth on Industry Standard Servers and Networking.

Enterprise Services fell 7% with declines on both Application and Business Services, and Infrastructure Technology Outsourcing.

Software fell 4%, with licence, support and professional services sales all falling, although software-as-a-service saw some growth.

Finally, HP Financial Services sales were down 9% year-on-year.

http://seekingalpha.com/article/2037513-hewlett-packards-ceo-discusses-f1q-2014-results-earnings-call-transcript?part=single


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