The down on its luck maker of expensive printer ink, HP has surprised Wall Street with the news that it quarterly revenue after sales from its PC division climbed 12 percent.
HP sales rose to $27.6 billion in its fiscal third quarter from $27.2 billion a year earlier. However that was a lot better than the cocaine nose jobs of Wall Street predicted. They had expected a modest drop in revenue to $27.01 billion. HP is trying to reduce a reliance on PCs and move toward servers, storage and networking for enterprises.
CEO Meg Whitman credited personal computer demand for "coming back some" as consumers and corporations upgraded ageing machines. She was pleased with 2 percent growth in revenue to $6.9 billion at the Enterprise Group, the company's second-largest business that deals in networking, storage and servers.
She said that it is a turnaround in a declining business. She singled out a 9 percent increase in sales of industry-standard servers in particular, saying uncertainty around Lenovo's acquisition of IBM low-end server unit helped steer business to HP. However now that deal is done and dusted, it could all disappear again.
Russia and China have been seen as weak spots for PC sales, for HP thanks mostly to the spying antics of the US government. It narrowed its earnings forecast for the full year to $3.70 to $3.74 per share, from $3.63 to $3.75. The company posted $1.7 billion of net earnings in the third quarter, up 3 percent and in line with forecasts.
Whitman said HP was assessing its $4 billion software business in view of an industry migration toward Internet-based or cloud software. And she said the company, with $4.9 billion in operating company net cash at the end of the fiscal third quarter, could make acquisitions if needed.