HP Posts Modest FQ1 Beat With Revenue Of $28.2B, Adjusted EPS Of $0.90

Today after the close, HP reported a slight beat in its fiscal first quarter, including net revenue of $28.2 billion, and non-GAAP earnings per share of $0.90. Investors had expected $27.19 billion in revenue, and $0.84 in per-share profit, excluding items.

HP’s revenue fell 1 percent year over year in the period. How might that be a beat? Well, if people expect your firm’s top line to contract by 4 percent, that’s a fine figure to have. HP’s non-GAAP earnings per share were up 10 percent, and its GAAP earnings per share were up 17 percent.

For its fiscal second quarter, HP forecasts that it will have earnings per share of $0.85 to $0.89 (non-GAAP). Analysts expected $0.89. HP is flat to down in after-hours trading, perhaps on that weakness.

After a difficult fiscal third quarter in 2013, HP has turned in two solid performances. I agree with Julie Bort that this is indicative of current CEO Meg Whitman’s plan for the company working.

Now, to PCs. Here’s HP’s line item on its personal computer business:

Personal Systems revenue was up 4% year over year with a 3.3% operating margin. Commercial revenue increased 8% and Consumer revenue declined 3%. Total units were up 6% with Desktops units down 3% and Notebooks units up 5%.

This jives with what we might have expected: Stronger commercial PC demand is more than making up for weakness among consumers. Microsoft’s OEM revenue breakdown, as you recall, told a similar story. Printing revenue slipped 2 percent. According to Whitman, HP “is in a stronger position today than we’ve been in quite some time.”

I agree.