HP Focus on Enterprise Hardware Begins To Pay Off

Meg Whitman is proving she's the man, er, the woman. Hewlett-Packard may not be where it needs to be, but the former eBay chief at least beat Wall Street's expectations with her push to focus on enterprise hardware.

Many analysts were predicting a significant drop in HP's quarterly revenue but that wasn't the case. HP netted $28.2 billion, down only 1 percent from the prior-year period and flat on a constant currency basis. HP also improved its operating company net cash position by $1.6 billion. That's the eighth consecutive quarterly improvement of more than $1 billion.

"HP is in a stronger position today than we've been in quite some time," said Whitman, HP president and CEO. "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."

Considering Acquisitions

Whitman didn't stop there. After working through some of the failed acquisitions her predecessors left her to clean up, she's now ready to venture into the buying field once again.

"I do think we will now be considering acquisitions," Whitman said on HP's earnings call Thursday. "As this market changes very dramatically, you can see we may need acquisitions in security, big data, mobility and cloud."

HP is likely to focus on enterprise acquisitions, given the company's success in this area. Enterprise Group revenue was up 1 percent year-over-year with a 14.4 percent operating margin. Industry Standard Servers revenue was up 6 percent; Storage revenue was flat; and Networking revenue was up 4 percent. Even revenue from H-P's Personal Computer Group which had been predicted...

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