HP reports mixed quarter on weak PC sales

Servers and network gear did well, but HP's PC and services groups fared poorly

Hewlett-Packard on Tuesday reported strong profits for its first fiscal quarter of 2011 but the results were dampened by weakness in its PC and services divisions.

HP's profit for the quarter ended Jan. 31 was US$1.36 per share before unusual items, up 27 percent from a year earlier and ahead of the $1.29 per share that financial analysts had expected, according to a consensus poll from Thomson Reuters.

Revenue was $32.30 billion, up 4 percent from a year earlier but below the $32.96 billion that analysts had been looking for.

"If you use Q1 as a marker, it's clear we do a lot of things well at HP. It's also clear that we have isolated areas that we need to improve," CEO Leo Apotheker told reporters after the results came out. "I'm committed to making these improvements to drive increased growth and operational excellence."

Revenue from HP's services division declined 2 percent from last year to $8.6 billion. Revenue from its Personal Systems Group also declined, by 1 percent, to $10.4 billion.

HP's enterprise hardware business fared better. Revenue from servers, network and storage gear climbed 22 percent to $5.6 billion. And revenue from printers and related products increased by 7 percent to $6.6 billion, HP said.

The company saw good growth from its commercial PC business but it was offset by weak sales to consumers. Apotheker blamed "softness" in the market but also acknowledged some channel issues at HP.

The services business was held back by weak short-term signings, especially in outsourcing and "value-added services," he said. HP had more success with larger deals, he said.

"We reported good results across most of the business but we have opportunities to improve growth in a few areas," Apotheker said.

HP made Apotheker its CEO last November and is in the midst of a minor makeover to improve its profitability and competitiveness. He's due to outline his plans for the company at an event in San Francisco next month.

The former SAP executive is expected to expand HP's efforts in enterprise software, as well as other profitable areas such as networking and storage.

HP is also expanding its focus on mobile gadgets. Earlier this month it announced a tablet PC and two smartphones based on the webOS software it acquired when it bought Palm last year.

HP is also shuffling its board, replacing four directors that were involved in the decision to oust CEO Mark Hurd last year. The new members include Patricia Russo, the former CEO of networking vendor Alcatel-Lucent, and Meg Whitman, who used to run eBay.

Join the PC World newsletter!

Error: Please check your email address.

Tags business issuesfinancial resultsHewlett-Packard

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

James Niccolai

IDG News Service
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?