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HP revenue short of Wall Street's estimates, plans more job cuts

Published 22/05/2014, 21:27

SAN FRANCISCO (Reuters) - Hewlett-Packard Co plans to cut as many as 16,000 more jobs in a major ramp-up of CEO Meg Whitman's years-long effort to turn around the personal computer maker and relieve pressure on its profit margins.

HP, which had originally planned to shed a total of 34,000 jobs as part of that corporate overhaul, said on Thursday it now estimated it needed to slash 11,000 to 16,000 more positions.

The Silicon Valley company is trying to reduce its reliance on PCs and move towards computing equipment and networking gear for enterprises, part of Whitman's effort to curtail revenue declines and return the world's No. 1 PC maker to growth.

On Thursday, the company posted a bigger-than-expected 1 percent drop in quarterly revenue, as it struggled to maintain its grip on the shrinking personal computer market while protecting profit margins.

That quarterly revenue decline was the 11th consecutive one for HP. It recorded sales of $27.3 billion in its fiscal second quarter, ended April 30, just shy of the $27.41 billion (£16.26 billion) Wall Street had expected.

The results were posted on HP's website more than half an hour early, ahead of the market's closing bell. Its shares slid as much as 3 percent before recovering to trade about 1 percent lower at $32.15.

HP did not immediately respond to requests for comment on its early results release. On Thursday, the company forecast full-year earnings of $3.63 to $3.75 a share, compared with Wall Street's estimate for $3.71. It reported non-GAAP diluted net earnings of 88 cents a share in the fiscal second quarter, up 1 percent from a year earlier and about level with what analysts, on average, had expected.

(Reporting by Edwin Chan; Editing by Steve Orlofsky and Richard Chang)

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