Hewlett-Packard CEO Meg Whitman told financial analysts on a conference call that “you can feel the turnaround taking hold” at the struggling tech company after HP beat Wall Street estimates for second quarter earnings.
HP posted earnings of 55 cents a share, whereas analysts were predicting 44 cents.
Whitman’s proclamation may be a little premature. EPS may be up, but profit is down substantially over Q12 last year, to $1 billion from $1.6 billion. That’s close to a 40 per cent year-over-year slide.
The share price returned Thursday to its 52-week high almost to the penny — in the $24 range — but that’s still a far cry from the $50-plus share price HP reached in 2011, shortly after Whitman replace Leo Apotheker as CEO. The share price bottomed out at about $11.
Is this enough to satisfy trigger-happy board of directors? Ray Lane resigned as chair in April, though he stayed on with the board. Two other board members also resigned in the shakeup over a succession of write-offs for acquisitions, particularly that of Autonomy. HP said it was misled over the price tag and wrote of $8.8 billion of its $11-billion investment. The board is looking for stability, and Whitman’s solid reputation is an asset on that front.
But PC sales are fading fast — Whitman overturned Apotheker’s decision to sell of the Personal Systems Group, which, though handled poorly, is starting to look prescient — and TBR analyst Cassandra Mooshian is predicting the performance of the services group will continue to weaken in 2013, though it’s positioned for improvement in 2014.