NEW YORK (

TheStreet

) --

HP's

(HPQ) - Get Report

second-quarter earnings report

showed glimmers of hope, but the company still has a long way to go before it gets back to the glory days of Bill Hewlett and Dave Packard.

The Palo Alto, Calif.-based firm reported fiscal second-quarter non-GAAP earnings of 98 cents a share on $30.70 billion in revenue. The no.1 PC maker highlighted the performance of its software business, which grew revenue 22% year-over-year, despite licensing weakness from

Autonomy

. Analysts polled by

Thomson Reuters

were looking for earnings of 91 cents a share on $29.91 billion in revenue.

Following the weak

earnings report

from

Dell

(DELL) - Get Report

, expectations for HP were incredibly low. HP, however, surpassed expectations as CEO Meg Whitman tries to turn around the $41 billion tech behemoth. Investors reacted positively to the numbers, sending shares sharply higher this morning.

HP is still a long way from getting its ship righted

Whitman said on the earnings conference call that HP is taking aggressive steps to rebuild, and cautioned that turning the company around is going to take a long time. As part of that effort, HP announced plans to cut 27,000 jobs, or 8% of its workforce by 2014.

One third of those cuts are expected to happen this year. The restructuring will save HP $3 billion to $3.5 billion by the end of fiscal 2014, but a significant portion of the savings are going to be reinvested in the company, as it tries to become the innovator and pioneer it once was.

"We're at the beginning of the turnaround, maybe 10%, 15% of the way there," Whitman said in an interview on

CNBC

this morning.

Barclays Capital analyst Ben Reitzes tempered investors' enthusiasm in a research report, noting the long process of turning HP around. "While we believe any turnaround will be a multi-quarter effort for HP, investors are likely to see this report as a positive first step. That said, in the context of demand deterioration in Europe and secular pressures still in many businesses into 2H12, we still believe it may be too early to make the call for a sustainable turn," Reitzes wrote in his note. He rates HP "equal weight" with a $26 price target.

Sharp revenue declines in HP's Imaging and Printing Group, services, and its Enterprise Servers, Storage and Networking division indicate that Whitman has a long way to go in turning HP around, and competing with the likes of

Apple

(AAPL) - Get Report

. For now, it seems like the bleeding has stopped, says Sanford Bernstein's Toni Sacconaghi. "Overall, we were encouraged by HP's quarterly results, which did show signs of stabilization and share improvement," Sacconaghi wrote in an investment note. He rates HP "outperform" with a $39 price target.

Better days may be ahead for the once mighty Palo Alto, Calif.-based company.

BMO Capital Markets analyst Keith Bachman believes HP could see better stock performance over the next few quarters compared to "revenue-dependent stories," as the restructuring process will help earnings growth, but not revenue. If HP is able to generate positive revenue growth next year, Bachman says the company's earnings multiple could expand, and shares could hit $30. He rates HP shares "market perform" with a $27 price target.

For now, HP appears to have earned investors' patience as it transitions its business, becomes leaner, and focuses more on higher-margin operations, like cloud, big data analytics, and security. Patience, however, can only last so long before investors start demanding results.

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Written by Chris Ciaccia in New York

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