Better-than-expected earnings for HP despite turmoil

Hewlett-Packard (HP), the world's leading personal computer maker, posted slightly better-than-expected earnings Monday after a tumultuous quarter. The Palo Alto, California-based company said its net profit declined 91 percent in the fourth quarter of its fiscal year to $239 million compared to the same quarter a year ago. HP's fiscal fourth-quarter results included $2.1 billion in charges and write-downs from the winding down of its webOS device business acquired from Pal, restructuring and acquisitions. Revenue fell three percent in the quarter to $32.1 billion, slightly better than the $32.05 billion expected by Wall Street analysts. Earnings per share of $1.17 were also better than the $1.13 expected by analysts. "HP has a great opportunity to build on our strong hardware, software, and services franchises with leading market positions, customer relationships, and intellectual property," HP chief executive Meg Whitman said in a statement. "We need to get back to the business fundamentals in fiscal 2012, including making prudent investments in the business and driving more consistent execution," Whitman said. Chief financial officer Cathie Lesjak said fiscal 2011 had been "challenging" and HP is "remaining cautious heading into fiscal 2012." HP forecast earnings per share of between 83 cents and 86 cents in the current quarter and $4 for the year. Analysts had forecast quarterly earnings per share of $1.11 and $4.84 for the year. Whitman, the former chief executive of eBay and unsuccessful candidate for governor of California, replaced Leo Apotheker as HP's CEO in September. Apotheker had proposed spinning off the PC unit and stopped production of the TouchPad, HP's rival to Apple's iPad, in a shift towards software and services for businesses. Whitman, just five weeks into her tenure, said HP will keep making PCs and produce tablet computers running Microsoft's Windows 8 operating system. The low-margin PC market has been flat amid an astronomical increase in powerful smartphones and the arrival of hot-selling tablet computers such as the iPad. HP said revenue declined two percent in its personal computer division in the quarter with commercial client revenue growing five percent but consumer client revenue falling nine percent. HP said services revenue grew two percent while revenue declined four percent in its enterprise servers, storage and networking division. Software revenue was up 28 percent and revenue from HP's imaging and printing group declined 10 percent. HP said revenue for the Americas fell four percent to $14.5 billion and was down six percent in Europe, the Middle East and Africa to $11.7 billion. Revenue increased three percent in Asia Pacific to $6.0 billion. HP shares were down 2.83 percent at $26.10 in after-hours trading.