HP shares soared seven per cent last night as the vendor announced better-than-expected results driven by its Enterprise Group.
On the back of a weak third quarter, analysts were not hopeful for its latest results, but a two per cent annual boost in Enterprise sales and a healthy showing on the bottom line was enough to drive up the price of its stock.
For the three months to 31 October, net profit reached $1.41bn compared with a loss of $6.85bn in last year's fourth quarter, while sales dropped annually by three per cent to $29.13bn (£17.9bn).
Its Enterprise Group was the jewel in HP's crown last quarter, with revenue up two per cent annually to $7.6bn – the first period of growth over the past eight quarters – and operating margin standing at 14.5 per cent. Within the division, its Networking Group's sales rose three per cent year on year, while its Industry Standard Servers and Storage arms were up 10 per cent and one per cent respectively.
Speaking about the results, HP boss Meg Whitman, who is approaching the mid-point of her grand five-year turnaround plan, said the changes she made to the Enterprise arm last year are paying off.
"As we discussed last quarter, we made significant leadership changes in the Enterprise Group," she said on a call transcribed by Seeking Alpha. "[Newly appointed Enterprise Group boss] Bill Veghte and his leadership team have hit the ground running and the early signs are encouraging."
The global PC market has been on a downward spiral for some time but HP managed to grow its revenue in its commercial PC business four per cent annually – a figure driven by notebooks, with its EliteBook Folio being the standout performer.
HP's total Personal Systems division Q4 revenue dipped two per cent annually to $8.58bn and its Enterprise Services arm's sales shrank nine per cent to $5.76bn. Its Software branch also dipped nine per cent annually to $1.06bn.
All regions' sales declined in Q4, with EMEA sales dropping the most – four per cent annually. The Americas and Asia-Pacific sales dropped two per cent and one per cent respectively.
Despite what HP described as a tough environment in Europe, it said the area's sales dipped less annually than in Q3 and that it was encouraged by growth in Germany and other pockets of western Europe.
Whitman (pictured) said her turnaround masterplan was working.
"Our Q4 results demonstrate that HP's turnaround remains on track heading into fiscal 2014," she said. "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.
"Through improved execution, strong cost management, and with the support of our customers and partners, HP ended fiscal 2013 on a high note."
For its full financial 2013, HP's sales fell seven per cent to $112.3bn while net profits climbed to $5.11bn, compared to a loss of $12.65bn for its fiscal 2012.
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