Hewlett-Packard Co. is cutting more jobs as Chief Executive Officer Meg Whitman pushes forward with a revamp of the company. The world's second-biggest personal-computer maker will eliminate 11,000 to 16,000 positions, on top of 34,000 already announced, the company said in a statement today. Hewlett-Packard had 317,500 employees at the end of October, including an unspecified number who work for the company's printer group in Corvallis.
Whitman has been working to restore growth since September 2011, when she took over the 75-year-old company. Hewlett-Packard is headed for a third straight annual sales decline amid lackluster demand for its PCs, printers and servers. Makers of traditional corporate computer systems are experiencing weaker demand as companies use software tools via the Internet, while providers of such cloud services are building their own equipment.
"I don't know that we've seen much that makes one feel that they can actually grow again," said Rob Cihra, an analyst at Evercore Partners Inc. He has the equivalent of a hold rating on the stock. "The company was falling apart. They've shored that up."
Profit excluding certain costs in the period ended April 30 was 88 cents a share on revenue of $27.3 billion, the Palo Alto, California-based company said today. Analysts had on average predicted profit of 88 cents and sales of $27.4 billion, according to data compiled by Bloomberg.
Hewlett-Packard shares fell 2.3 percent after the release of a partial statement, followed by a full statement, both of which came before the close of trading in New York. The stock declined to $31.78, leaving it up 14 percent so far this year, compared with a 2.4 percent gain in the Standard & Poor's 500 Index.
Net income in the second fiscal quarter rose 18 percent to $1.27 billion, or 66 cents a share, from $1.08 billion, or 55 cents, a year earlier. Revenue fell 1 percent to $27.3 billion.
For the third quarter, Hewlett-Packard forecast that profit, excluding amortization, restructuring charges and other costs, will be 86 cents to 90 cents a share. That compares with the average analyst estimate for 90 cents.
Worldwide PC shipments dropped in the first three months of 2014 as consumers in emerging markets opted for smartphones and tablets, while corporate demand helped slow the pace of decline. Quarterly shipments fell 4.4 percent to 73.4 million units, IDC said. Hewlett-Packard's market share rose to 16 percent, making it the No. 2 vendor after Lenovo Group Ltd., Gartner Inc. said last month.
One of Silicon Valley's oldest companies, the manufacturer's product range spans from PCs and home printers to the servers, networking gear and software used by corporations. Hewlett-Packard has fallen behind in mobile computing, where consumers have migrated to smartphones and tablets made by Apple Inc. and Samsung Electronics Co.
"With the first half of our fiscal year completed, I'm pleased to report that HP's turnaround remains on track," Whitman said in the statement.