HP Shares Rise After Better-Than-Expected Q4
HP shares were up $1.81 per share, or 7 percent, to $26.90 in early after-hours trading after the $112 billion Palo Alto, Calif.-based computer giant disclosed financial results for its fourth fiscal quarter, ended Oct. 31.
The company posted non-GAAP diluted earnings per share of $1.01 on sales of $29.1 billion for the quarter, just above the Wall Street consensus of $1 per share on sales of $27.9 billion.
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The non-GAAP diluted earnings were down 13 percent from the year-ago quarter. Despite beating analysts' estimates, sales were down 3 percent from same period one year ago.
The company's industry standard servers sales were up 10 percent in the quarter compared with a decline of 11 percent in the preceding quarter.
Hewlett-Packard, in fact, grew worldwide server shipments by more than 5 percent in the third quarter year-over-year, halting a slump of eight consecutive quarters of shipment declines, according to preliminary market data from Gartner.
At the same time, Dell's worldwide server shipments, which in the second quarter fell just shy of HP's according to preliminary estimates from Gartner, plummeted by more than 14 percent in the third quarter as the company closed a $24.9 billion leveraged buyout spearheaded by Dell Founder, Chairman and CEO Michael Dell.
HP's strong industry-standard server showing came just three months after CEO Meg Whitman shook up her management team putting HP COO Bill Veghte in charge of the once-struggling enterprise group business.
The Enterprise Group's overall sales in the fourth fiscal quarter were up 2 percent to $7.59 billion compared to $7.45 billion in the year-ago quarter, and up 12 percent compared to the preceding quarter.
The Enterprise Group turnaround came after Whitman pledged to step up the server battle with Dell, saying she would not accept "very aggressive competitive pricing" from Dell or others as an "excuse" for poor sales performance at HP.
"Through improved execution, strong cost management, and with the support of our customers and partners, HP ended fiscal 2013 on a high note," said Whitman in a press release announcing the results. "Our Q4 results demonstrate that HP's turnaround remains on track heading into fiscal 2014. While we still have much more work to do, our business units and their core assets are delivering on HP's strategy to help customers thrive by providing solutions for the New Style of IT."
Kelly Ireland, founder and CEO of CB Technologies, a Westminster, Calif.-based HP enterprise partner, said the big bets made by Whitman in teaming aggressively with channel partners and building innovative new products is paying off in sales growth.
Ireland said she is doubling down on HP in the wake of the new PartnerOne program, doubling the size of her staff and betting big on new innovative platforms like Moonshot and Haven.
"I couldn't be happier about being an HP-only partner," she said. "The changes Meg has made, embracing the channel and focusing on channel issues and innovation, are paying off."
PUBLISHED NOV. 26, 2013