HP reported a slight year-over-year revenue decrease for the first quarter of fiscal 2014 and a hefty profit improvement as the company continued the turn-around its CEO Meg Whitman started about two years ago.

The turn-around plans include changes in cost structure, a pivot to a new style of IT and a new style of investment and innovation. Some of the changes HP started then are changes its competitors, such as IBM, are going through today, Whitman said on the company's earnings call.

Commenting on IBM's recent sell-off of its x86 server business to the Chinese multinational Lenovo and the impending emergence of another strong competitor in that space, Whitman said HP never underestimated competition but had had a two-and-a-half-year head start in adjusting to market changes.

HP's strategic shift largely consists of a focus on converged infrastructure, integrating and automating management of all aspects of IT infrastructure.

The company started the adjustment early because it was forced to, given its poor financial performance when Whitman took the wheel. “In the long term, Lenovo is going to be a powerful competitor,” she said, and when it becomes so, HP will be prepared to fight that fight.

“The pace of change and the magnitude of the change here is as big as I’ve seen in my career,” she said. To stay afloat as the changes take place, HP will be making more acquisitions.

“We may need acquisitions in security, big data, mobility and cloud,” Whitman said. But the company will be judicious in buying more businesses, limiting itself to small and medium-size firms, she added.

HP's revenue for the quarter was US$28.2bn – a 1% decline from the first quarter of fiscal 2013. Net Q4 earnings were $1.4bn – a 16% improvement year over year.

Sales of the enterprise group – the group that sells data center hardware – went up 1% year over year. The group reported a 6% increase in revenue from industry standard servers, flat storage revenue, a 4% increase in networking revenue and 25% decline in revenue from business critical systems.

Software revenue was down 4% year over year.