Hewlett-Packard CEO Meg Whitman

Small gain in sales reverses nearly four years of declines as CEO Meg Whitman tries to revive the tech giant.

By Tom Huddleston, Jr.
August 20, 2014

The big number: Hewlett-Packard said third quarter revenue grew 1% to $27.6 billion, the tech giant’s first quarterly sales gain in nearly four years. Profits fell 29% to $985 million. On a per share basis, H.P.’s profit was 52 cents compared with 71 cents a year earlier. However, the company said its adjusted profits, which exclude certain restructuring costs, was 89 cents per share. On that basis, the company’s earnings rose 3%, in line with Wall Street estimates.

What you need to know: Though CEO Meg Whitman has maintained that HP’s HPQ ongoing turnaround likely won’t be completed until 2016, analysts were keen to get a look at the company’s updated forecast for the remainder of the 2014 fiscal year. The company increased the low-end of its full-year outlook on Wednesday to profits of $2.75 to $2.79 per share (previously, it said it could be somewhere between $2.68 and $2.80).

Despite more or less meeting estimates, H.P.’s shares fell a modest .6% in after-hours trading on Wednesday after already dropping 1% during the day. Whitman said in a statement that she is “very pleased” with the company’s progress. “When I look at the way the business is performing, the pipeline of innovation and the daily feedback that I receive from our customers and partners, my confidence in the turnaround grows stronger.”

What you might have missed: Until recently, Whitman has had little to point to in her turnaround effort aside from costs savings from job cuts and lower expenses. The goal has been to offset a precipitous drop in revenue from personal computer sales. But sales numbers for the company’s computer division have started to rebound. They jumped 11.8%, to $8.6 billion in the latest quarter, after climbing 7% in the previous quarter. Included in those numbers was a 9% increase in desktop sales in the third quarter, on top of a 6% increase the previous quarter. In contrast, HP’s desktop sales dropped 7.5% overall in 2013, following a market-wide trend of declining PC sales as consumers turn to tablets. But some analysts have predicted better-than-expected sales in that market for this year.

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