Hewlett-Packard Earnings: Has Whitman Turned the Ship Around?

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Source: Thinkstock

Source: Thinkstock

Hewlett-Packard Company (NYSE:HPQ) set a fresh 52-week high of $30.28 on Thursday and closed the regular trading session up 2.51 percent at $30.19 as investors anticipated good news in the company’s fiscal first-quarter earnings report. Analysts were expecting revenue to drop 4.1 percent to $27.19 billion and earnings to increase by 2.4 percent to 84 cents per share — and they weren’t disappointed.

Hewlett-Packard reported that fiscal first-quarter revenue shrank by just 1 percent to $28.2 billion, and that adjusted earnings increased 10 percent to 90 cents per diluted share. Adjusted operating margin increased by 60 basis points to 8.5 percent, and cash flow from operations increased 17 percent to $3 billion. Adjusted net earnings increased 9 percent to $1.7 billion.

“HP is in a stronger position today than we’ve been in quite some time,” said Hewlett-Packard President and CEO Meg Whitman in the earnings release. “The progress we’re making is reflected in growth across several parts of our portfolio, the growing strength of our balance sheet, and the strong support we’re receiving from customers and channel partners. Innovation is igniting our comeback, and at a time when many of our competitors are confronting new challenges, two years of turnaround work is setting us up for an exciting future.”

Whitman took over at Hewlett-Packard in January 2011, the same year that the company made the ill-fated purchase of British enterprise software company Autonomy. The company, which was bought for $11.1 billion, contributed to an $8.8 billion write down that shook many investors out of the company and forced Hewlett-Packard into damage-control mode. Whitman, who was hired as a turnaround CEO, has been overseeing a long investigation into the acquisition, which may result in a settlement with shareholders.

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