NEW YORK, N.Y. – Hewlett-Packard posted net income of $1.4 billion for its fiscal fourth-quarter, as cost cuts stemming from its ongoing restructuring more than offset the effects of sluggish computer demand.
The world’s second-largest maker of PCs, considered a bellwether in the technology industry, also issued a strong profit prediction for the current quarter.
The Palo Alto, Calif.-based company’s stock rose $1.62, or 6 per cent, to $26.71 in extended trading after the results were released. The shares had dipped 16 cents to close at $25.16 in Tuesday’s regular trading session.
So far this year, HP’s stock has gained about 77 per cent.
CEO Meg Whitman said better execution and cost management were driving the positive results. She said that while there is still much work to do, the quarter’s results show HP’s turnaround remains on track heading into fiscal 2014.
Whitman said on a conference call with investors that the company’s personal computer business outperformed the rest of the industry. Its revenue fell 2 per cent during the company’s August-October quarter, but was flat excluding the effects of currency exchange rates. Meanwhile, industry wide computer shipments dropped 9.5 per cent in the July-September period, she said.
The personal computer industry has struggled in recent years as consumers turn their attention toward smartphones and tablet computers. HP has tried to offset declining PC demand by cutting costs and focusing on more profitable areas such as commercial and home printing.
Lately the company has been optimistic about the future. Last month, the company predicted that fiscal 2014, which started in November, will be a year of “recovery and expansion.”
For the quarter ended Oct. 31, HP’s profit amounted to 73 cents per share and compared with a loss of $6.9 billion, or $3.49 per share, in the same period a year ago. Excluding one-time charges, the company earned $1.01 per share for the recent period.
Revenue fell 3 per cent to $29.1 billion.
Analysts polled by FactSet expected a profit of $1 per share on $27.86 billion in revenue.
For the fiscal first quarter, the company predicts an adjusted profit of between 82 cents and 86 cents per share. HP also backed its previously issued fiscal 2014 profit prediction of $3.55 to $3.75 per share.
Analysts expect first-quarter earnings of 85 cents per share and a fiscal-year profit of $3.64 per share.