Hewlett-Packard Company (NYSE:HPQ) concluded their second quarter with a boost to their personal computer sales. This came as a surprise to many who thought that the PC sales were well past the due date. Bloomberg’s Cory Johnson talked on Bloomberg TV about HP’s surge in PC sales and future of the company.
Hewlett-Packard Company (NYSE:HPQ)’s CEO, Meg Whitman, has benefited largely from the late surge in PC sales towards the end of the second quarter. Johnson pointed out that the surge in PC sales was due to the fact that Microsoft Corporation (NASDAQ:MSFT) were planning to terminate their Windows XP support, which pushed many to place the orders. “The Windows XP expiration has contributed to our growth, although we believe we are now through much of that benefit”, Whitman was quoted as saying during HP’s conference call.
“[…] This was a one time thing and they were pretty careful in pointing that out in the discussion, in the conference call. So may be investors shouldn’t get too excited about that,” Johnson said.
Johnson pointed that Hewlett-Packard Company (NYSE:HPQ) could use the revenues from their PC, Server and Printing business and develop their software business through acquisitions. But he feels that there is no hint of any such moves from HP.
Hewlett-Packard Company (NYSE:HPQ) continued to restructure and fire their employees. In the last 12 months, they have fired around 50,000 employees and incurred significant restructuring cost. Johnson said HP has been restructuring for the past 15 years. Another important thing to note is that HP always reports the non-GAAP earnings, which excludes the restructuring costs. Johnson thinks that the non-GAAP earnings does the reflect the correct earnings for a company like HP.
Johnson thinks that Whitman might be more inclined to report the non-GAAP earnings to highlight the business which she thinks as the future of the company. He pointed out that 25% of Whitman’s bonus were based on the non-GAAP earnings as well.
Hewlett-Packard Company (NYSE:HPQ)’s top shareholder is Relational Investors, managed by Ralph. V. Whitworth. They hold around 27.8 million shares of the company.