First Take: PC sales come to HP's rescue

SAN FRANCISCO -- Hewlett Packard has an unlikely source to thank for its surprisingly strong third-quarter revenue: PC and notebook sales.

This is not a typo.

Riding a recent resurgence in PC shipments, HP today registered a 1% increase in year-over-year revenue to $27.6 billion.

Consumer sales was "one of the key factors" for the rise in revenue, Cathie Lesjak, HP's chief financial officer, told USA Today in a phone interview late Wednesday. "People wanted to perform more complex tasks on a PC."

The company's Personal Systems group, which includes PCs and notebooks, grew 12% year over year. Desktops account for about 40% of HP's revenue.

HP shares were down slightly, to $34.82, in after-hours trading. HP announced its results after markets closed.

HP shares are up 26% since the beginning of the year.

The turn in fortunes is ironic. It was the gradual disintegration of the PC market that got HP into its present mess.

But a funny thing happened on the way to the PC's presumed death: Consumers are opting for larger computer screens and sophisticated tasks, which they don't often get with tablets.

The quarterly results today offered a respite from the previous quarter, when HP announced up to 16,000 layoffs amid ho-hum results. The tech giant previously announced 34,000 job cuts as part of CEO Meg Whitman's multiyear restructuring plan. The company currently employs nearly 300,000 worldwide.

The cutbacks, which are expected to save $1 billion in costs in fiscal 2016, have been presented by Whitman as an opportunity to make HP more nimble and invest in new technologies to revive growth.

The cost-cutting measures -- not to mention a recent uptick in PC sales -- should help matters, though tepid IT spending and fierce competition from IBM and Oracle remain challenges.

HP recently unfurled HP Helion Network, a cloud-based suite of products and services for corporate IT departments.

But, for now, it was PCs to the rescue for the venerable tech pioneer.

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