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HP's Whitman: PC market is definitely getting better

Fresh off reporting better-than-expected earnings, Hewlett-Packard CEO Meg Whitman told CNBC on Friday she sees "brightness" in the PC market despite gloomy forecasts in that sector and a move toward cloud computing.

"The market is definitely getting better," Whitman said on "Squawk on the Street." "Business is understanding and employees are understanding that they may want a tablet, but they also need more traditional compute devices to get their work done that is going to be required in this world of big data and analytics."

After the bell Thursday, HP posted strong first-quarter growth in its enterprise group, which focuses on servers and other hardware. Despite slightly decreasing operating margins, that group had its second-consecutive quarter of growth after two years of revenue declines.

Whitman told CNBC that her company can't be wary of favoring growth areas at the expense of legacy products. She cited strong growth in India and Europe's developed markets as bright spots, while other regions remains flat or hard to predict. Responding to concerns over whether a company that once dominated the PC market could adapt to the next wave of computing, Whitman said HP's "innovation engine" was alive and well.

"We have to be willing to cannibalize ourselves, because if we don't do it to ourselves, someone else will," Whitman said. "We'll play in consumer, but commercial is where we have a right to win."

(Read more: HP reins in revenue slide as turnaround progresses)

The positive quarter suggests that HP's gamble on hardware, part of a years-long turnaround plan from a shrinking PC market to a mobile and cloud-based environment may be paying off. HP's revenue fell by about 1 percent to $28.2 billion, with income growing 16 percent to $1.4 billion—both numbers beating Wall Street estimates.

The turnaround plan also called for massive workforce reductions at the computer hardware manufacturer, which in December adjusted its layoff projections to 34,000 workers through 2014.

Meg Whitman
Ronda Churchill | Bloomberg | Getty Images
Meg Whitman

Whitman told CNBC that future cost-cutting measures could no longer remain a "one-time event" if the company wants to remain competitive.

"Everything we do we have to look at and say, 'How do we get better every year and build productivity into the DNA of the company?'" Whitman said. "We're on our journey there. We're not through. We're on the journey."

Caught in heated competition with Dell, IBM, and China's Lenovo, Whitman said she sees opportunities to gain market share during the migration to cloud computing. Whitman said Lenovo's purchase of low-end servers from IBM added uncertainty to the industry, and HP needs to capitalize on that.

"We look like the paragon of stability at this junction relative to what's happening at IBM, and Lenevo is biting off two big acquisitions," Whitman said.

(Read more: Former HP executive stars on brink of exit: Wires)

In November, Whitman told CNBC that revenues would most likely stabilize in 2014, but not grow, as the company focuses on the business computer and tablet market. She also said HP would make small inroads into 3-D printing. On Friday, Whitman said it was too early to adjust the company's growth forecasts, but that the ultimate goal of her turnaround plan remains to make HP a growth company again.

(Read more: Expect revenue to stabilize in 2014: HP's Whitman)

Whitman also weighed in on the blockbuster deal that turned heads this week between Facebook and instant messaging service WhatsApp, saying that Facebook founder Mark Zuckerberg made the right call by betting on a mobile. She would not comment on the price tag, which ranged up to an eye-popping $19 billion.

"I cant comment on the economics of the deal," Whitman said. "But I think Mark has done a good job and Mark deserves the benefit of the doubt."

—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street." Reuters contributed to this report.

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