Investors waiting for signs that Hewlett-Packard Company (NYSE:HPQ) has turned the corner may not have to wait longer.
There are signs of progress for Hewlett-Packard Company (NYSE:HPQ) in its latest quarter, indicating that turnaround efforts are running ahead of schedule. Its fiscal first-quarter numbers topped what the slumping personal computer maker’s own management and stock market analysts had forecast.
Like other PC makers, Hewlett-Packard Company (NYSE:HPQ) has been struggling to adapt to a shift towards smartphones and tablet computers, which are siphoning sales from desktop and laptop machines made by Hewlett-Packard Company (NYSE:HPQ) and other companies. Adding to the problems were some acquisitions gone awry. Over the past two quarters, HP announced losses totaling $15.3 billion as the company accounted for those mishaps, to the shock of Wall Street. The jolt caused HP’s stock to plunge to its lowest price in a decade just three months ago.
The shares have rebounded since then, though they still remain about 20 percent below where they were in Sept. 2011, when the company fired Leo Apotheker as its CEO and hired Meg Whitman, who became a high-tech star while running eBay Inc (NASDAQ:EBAY)‘s online marketplace.
The same problems are still plaguing HP, but signs of progress in the latest quarter indicated that the company’s turnaround efforts are running ahead of schedule. Whitman has consistently said it may be several years before HP is on solid ground again.
HP’s turnaround is confirmed by its technical chart. It is visible from the chart that the stock is currently trading above its 50-day and 100-day moving averages, showing signs of resuscitation.
In a show of confidence, HP has provided an earnings forecast for the latest quarter that was higher than analysts’ projections. HP earned $1.2 billion, or 63 cents per share, in the three months ending Jan. 31. That was a 16 percent decrease from nearly $1.5 billion, or 73 cents per share, at the same time a year earlier. Excluding certain accounting items, HP would have earned 82 cents per share. That was well above the average estimate of 71 cents per share among analysts surveyed by FactSet. Revenue fell 6 percent to $28.4 billion, about $470 million above analysts’ projections. It was nearly $30 billion a year earlier. It’s the sixth consecutive quarter that HP’s revenue has dropped from the previous year.