HP enterprise sales spark recovery hope

There are hopes that the maker of expensive printer ink, HP might actually be on the path to recovery after it beat revenue forecasts as sales growth in its enterprise group.

Revenue from the enterprise group, which Chief Executive Meg Whitman wants to expand climbed two percent, aided by a 10 percent rise in server sales and three percent growth of the networking business.

To be fair expectations were low, after HP had a miserable third-quarter performance, and after rivals such as IBM and Cisco had reported poor results.

The pickup in enterprise hardware revenue in the fiscal fourth quarter was needed after after a  nine percent slide in sales from the same division in the previous three months.

Edward Jones technology analyst Bill Kreher told Reuters that there is some hope in HP’s restructuring given that the company was able to jump over what was admittedly a pretty low hurdle.

However he thought that any signs of a turnaround will remain uneven.

In fact HP”s operating margins eroded and Non-GAAP operating margin slipped to 9 percent in the quarter from 10.4 percent a year earlier, reflecting aggressive competition from rivals such as Dell and Lenovo.

Revenue fell across most of HP’s business divisions except the enterprise group, whose sales edged up to $7.6 billion. Sales from HP’s largest PC-focused unit fell another two percent to $8.58 billion while the printing division’s sales dropped a percent to $6.04 billion.

Still, shares in HP climbed above $27 after starting at $25.09 so everyone is feeling fairly optimistic.