Speaking at HP's analyst conference in San Francisco yesterday, Fiorina warned the company would still face difficult markets in 2003.
Despite the better-than-expected cost reductions, Fiorina refused to raise estimates of next year's turnover and profits. "We are not going to raise guidance because the economy continues to be uncertain, and we want to make sure we are not getting ahead of ourselves," she said.
HP expected to post revenue of close to $18.4bn for its first quarter of 2003, with growth for the full year expected at 2% to 4%.
The company has shown improved performance in its print and imaging businesses following the Compaq acquisition, helping it to offset losses in its PC and server businesses. It expected to bring its computer hardware operations back to profitability next year.
To help meet its goals, HP has moved two former Compaq executives into senior positions.
HP hopes to squeeze more revenue out of its Enterprise Systems Group, although it probably would not meet an earlier projection of 4% to 6% growth for the year for that division, Fiorina said. However, she pledged that the group, which sells servers, storage equipment and software, will be profitable by next year.
HP is locked in a battle with Dell Computer, IBM and Sun Microsystems to capture customers willing to invest in their technology infrastructure. In its most recent quarter, HP lost $152m on its enterprise hardware business.
HP's PC and printing businesses received a boost during the US Thanksgiving holiday at the end of November.
"We needed it to be good," she said. "In both our imaging and printing and PC categories, where we saw the best new growth was in hot new products," she said.
HP expected software purchases to lead the recovery in IT spending followed by storage and Intel-based server sales.