First Quarter Revenue and Earnings at HP Top Estimates

On Thursday, Hewlett-Packard Co. reported its revenue and earnings for the first quarter that exceeded forecasts on Wall Street. The biggest reason was the surprise strength in it sales of personal computers to businesses.

The company was helped from a bump from companies that upgraded their Windows 7 and bought new computers for employees prior to Microsoft stopping its support of Windows XP this April.

Meg Whitman, the CEO, said the upgrade cycle at Windows was important but it was not overwhelming. The CEO said that companies were also starting to buy new computers.

Wittman said it is too early to call the purchasing of new computers a turnaround in the trend of declining sales of PCs.

The company, based in Palo Alto, California said its outlook for the second quarter was a bit below that of forecasts, while its outlook for the full year was in line.

Net income for the quarter that ended January 31 was up 16% to end at $1.43 billion equivalent to 74 cents a share, from the $1.23 billion or 63 cents a share from the same period one year ago.

Excluding all restructuring and other charges, the company’s adjusted earnings were 90 cents a share. Analysts had expected that to be 85 cents a share.

Revenue was down 1% to end the quarter at $28.15 billion, but ended flat excluding effects on currency. Analysts were expecting revenue of $27.21 billion.

Sales of personal computers were up 4% to end the quarter at $8.53 billion, which bucked the decline globally. Gartner, Inc the research company said in January that PC shipments globally were down 7% over the last quarter of 2013.

Revenue from printing was down 2% to end the quarter at $5.82 billion while revenue at the enterprise group, which has consulting on technology increased by 1% to more nearly $7 billion.

HP said it expects its adjusted earnings for the second quarter to be between 85 and 89 cents a share. It also expects its adjusted earnings for the full year to be between $3.60 and $3.75 a share.

HP shares were up 23 cents in trading after hours on Thursday and reached $30.42. During the day’s regular trading hours, the stock was up 2.5% of 74 cents.

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