Hewlett-Packard reported better-than-expected first quarter earnings and revenue as the PC business delivered sales growth amid enterprise demand.
The company reported first quarter earnings of $1.4 billion, or 74 cents a share, on revenue of $28.2 billion, down 1 percent from a year ago. On a constant currency basis, HP's revenue was up slightly. Non-GAAP earnings for the first quarter was 90 cents a share.
As for the outlook, HP said that it expects to report second quarter non-GAAP earnings of 85 cents a share to 89 cents a share. Wall Street was looking for second quarter earnings of 89 cents a share. For 2014, HP projected non-GAAP earnings of $3.60 to $3.75 a share compared to Wall Street estimates of $3.67 a share.
CEO Meg Whitman said that HP's restructuring was largely complete just as rivals were "confronting new challenges." Look for HP to argue that Lenovo will have integration challenges with integrating IBM's x86 server business and note IBM's retooling.
The biggest surprise for HP was the PC business. Personal systems revenue was up 4 percent in the second quarter with commercial sales growing 8 percent. Consumer PC sales fell 3 percent.
HP's printing business was also strong with operating margins of 16.8 percent as revenue fell 2 percent. The enterprise unit saw revenue growth of 1 percent with industry standard server sales growing 6 percent.
Enterprise services revenue, which was supposed to be decent, was down 7 percent. Software revenue fell 4 percent.