With the decline in printer and PC sales, Hewlett-Packard reported a drop in profit for the last quarter. However, the company said that their cost-cutting measures announced last year are starting to pay off.
HP’s Declining Profit
Last Thursday, HP announced their earnings for the first quarter of their fiscal year, which ended last January 31. Accounting to $1.2 billion, their revenue went down to 16 percent from the same quarter last year.
Sales of PCs and workstations fell to 8 percent either, while its printer division suffered a 5-percent loss. The company’s enterprise group that sells server, storage and networking gear saw a 4 percent revenue decline, as well as their software and enterprise services.
As of the moment, HP has reported six quarters of declining profit and revenue. That is after the company encountered a turmoil, which saw two leadership changes within a year and a botched plan to spin off their PC division that HP later reversed.
Under the leadership of CEO Meg Whitman, HP announced a restructuring plan last year that includes reducing its workforce by 27,000 people. Their goal is to reduce the company’s costs so they can invest in new products and expand their business. The CEO pointed out that their efforts have started to pay off:
While there’s still a lot of work to do to generate that kind of growth we want to see, our turnaround is starting to gain traction as a result of the actions we took in 2012 to lay the foundation for HP’s future.
The recent quarter’s Pro forma earning, which exclude certain one-time charges, were $0.82 per cent. Although it’s down by 11 percent from a year earlier, it is still better than the $0.71 expected by financial analysts.
However, HP is not the only corporation who’s suffering. Dell reported a 31 percent drop in profit earlier this week, and CEO Michael Dell is trying to take the company private. That way, they can escape Wall Street’s scrutiny as they rebuild the business.