HP Profits Slip But Beat Wall Street Expectations

Hewlett-Packard announced its quarterly earnings were down 90 percent from the previous quarter. The company is going through big changes. It just spent most of its cash on an acquisition, took on $4 billion of debt and named Meg Whitman as the new CEO.

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Hewlett Packard has had a tumultuous year. The technology company came out with its latest earnings yesterday, and reported a 90 percent drop in income. That's still better than what Wall Street analysts were expecting. NPR's Wendy Kaufman has more.

WENDY KAUFMAN, BYLINE: A year ago, HP earned $2.5 billion in the fourth quarter. This year, it was less than $240 million. The company had a sizable write-off in part of its mobile business. And its personal computing unit remains weak. But the biggest news for the quarter was the management shakeup. The board ousted the chief executive and brought in former eBay CEO Meg Whitman.

ROB ENDERLE: Actually, I'm very impressed. She's focusing the company back on financial basics.

KAUFMAN: That's veteran technology analyst Rob Enderle.

She's approached this methodically, and that's really what the company needed. They needed somebody not to come in and, you know, parachute in and start firing from the hip, but somebody to come in and learn what the strengths and weakness were, and then make decisions based on facts.

One of Whitman's first decisions was to not spin off the company's huge PC business. That's something her processor had proposed over the summer. Still, the company faces considerable challenges. Industry-wide, PC sales are declining, and many of HP's other business units are also seeing drops in revenues and profits. Indeed, the company's forecast for the first quarter of next year is weaker than Wall Street had been projecting. Wendy Kaufman, NPR News.

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