Growth In Revenue Calls Forth For Turnaround In HP Enterprise

Wall Streets had forecasted that companies like Hewlett-Packard will not see growth in revenue as the market is on the low for hardware companies as other companies like CISCO Systems Inc and International Business Machines Corp had performed poorly. Hewlett-Packard too performed badly in its third quarter and so there were no such expectations from the company.

However with a 10 percent increase in its sales of servers and 3 percent growth in its networking business, Hewlett-Packard has shown remarkable growth in its revenue. The company’s CEO Meg Whitman is hoping for expansion and growth for the company in the near future, although they are optimistic about their turnaround plans.

The fourth quarter growth in revenue in the hardware enterprise after a 9 percent decline in the third quarter in the same division was quite a surprise for the company and the market. Such pickup in sales has build up the confidence of Whitman who was vying for the company’s turnaround.

Meg Whitman, who took up the charge of Hewlett-Packard for the past one year hopes that the year 2014 will bring in stability in the growth of the company as well as revenue for the enterprise. The sale of personal computers have gone for a landslide globally in the year 2013 and any rise in sales this year would be welcomed by the company.

According to technology analyst, Bill Kreher, Hewlett-Packard’s performance in the fourth quarter is better than what was expected as compared to companies like Cisco and IBM and so there is hope for HP as it has been able to succeed in such a market. However the company’s operating margin declined considerably from 10.4 percent to 9 percent this year. Competition from rival companies like Lenovo Inc and Dell Inc is too posing a threat as they are quite strong in the market.

Hewlett-Packard is trying to stay in business and show growth by cutting jobs and venturing into parts of the market which has a potential for long term growth like computing services. The CEO is bent on reviving the company’s growth. Shares of the company saw a rise from $25.09 to $27 in extended trading on the New York Stock Exchange.

Except for the enterprise group, most of the divisions of the company have seen a decline in revenue. Its personal computer division and printing division’s revenue dropped to 2 percent and 1 percent respectively.

HP has done well in its networking business in Europe and China and has also been doing well in parts of Asia; however there is tough competition for the company in the global market.

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