NEW YORK ( TheStreet) - HP ( HPQ), the No. 1 PC maker, still faces massive challenges, even after offering good news to its long-suffering investors with better-than-expected first-quarter results and guidance on Thursday The embattled tech giant's shares climbed almost 8% on Friday as investors heaved a sigh of relief that HP surpassed Wall Street's modest expectations. The company also spared investors a negative-news body blow like last quarter's $8.8 billion Autonomy write-down or the third quarter's $10.8 billion charge for the EDS acquisition. HP CEO Meg Whitman, who kicked off a massive restructuring program in May 2012, said that the company's profit was fueled by better execution and improvements in its channel and go-to-market efforts. The CEO added that she feels good about the rest of the year, with the company focused on delivering its full-year outlook. "Fiscal 2013 is the second year in a multi-year journey to turn HP around," she said during HP's earnings conference call on Thursday. "The restructuring program had a meaningful impact on the bottom line in the first quarter, and we expect that that will accelerate as we move through fiscal 2013. If I had to characterize it, I would say that the patient showed some improvement." Nevertheless, investors should remain wary of HP, according to analysts. "Our view remains unchanged, we believe the challenges across HP's portfolio and massive downsizing initiatives during this critical transition period in the IT market will leave HP less relevant over the next 12-18 months," wrote Brian White, an analyst at Topeka Capital Markets. "As such, we remain sellers of HP on any strength this morning." Clearly there are still big hurdles still in the company's path, as evidenced by first-quarter declines in its major business units. Personal Systems sales, for example, declined 8% year over year, while Printing revenue was down 5%. Speaking during HP's earnings conference call, CFO Cathie Lesjak acknowledged that the business deceleration in Personal Systems is worse than the company expected. HP's Enterprise Group sales dipped 4%, and Enterprise Services revenue was down 7%. Software revenue slumped 2%, although Financial Services sales grew 2%.
Baird Equity Research analyst Jayson Noland said he expects further weakness in in HP's Services business during the second half of fiscal 2013. He maintained his 'neutral' rating on the company. "HPQ shares have rebounded with stabilizing fundamentals and a better equity market, but we prefer to stay on the sidelines given remaining concerns on secular and competitive challenges," he wrote, in a note released on Friday. HP, which describes fiscal 2013 as a "fix and rebuild" year, has at least made some slow progress, according to ISI Group analyst Brian Marshall. The company's overhaul of its multi-function printers, new storage products and advances in its networking technology could bear fruit in the second half of the year, he said. Nonetheless, the analyst maintained his 'neutral' rating on the ailing tech titan, citing weakness in PCs and printing that shows no sign of abating, as well as lackluster growth in areas such as software and services. HP investors may have welcomed the company's first-quarter results, but there's clearly more pain ahead. --Written by James Rogers in New York. Follow @jamesjrogers >To submit a news tip, send an email to: email@example.com.