HP profit climbs 28 percent, company raises outlook again

Printer, industry-standard server and PC businesses report strong growth

Hewlett-Packard's first-quarter profit increased by 28 percent from a year earlier as growth returned to some of its core businesses, prompting the company to raise its forecast again for the fiscal year.

HP's profit for the quarter ended Jan. 31 was US$2.3 billion, up from $1.9 billion in the same quarter last year. Revenue increased by 8 percent to $31.2 billion, HP announced Wednesday.

The company's printer, industry-standard server and PC businesses all reported revenue growth, HP said -- a turnaround from last quarter, when sales declined in almost all of its main business segments. Revenue from HP's giant services segment decreased by 1 percent, however, to $8.7 billion.

"HP is well-positioned to outperform the market," Chairman and CEO Mark Hurd said in a statement. "The strength of our portfolio, leaner cost structure and accelerating market momentum give us the confidence to raise our full-year outlook."

Excluding one-time items, HP reported pro forma earnings of $1.10 per share, up from $0.93 a year earlier. Analysts had expected pro forma earnings of $1.06 per share on revenue of $30.01 billion, according to a poll by Thomson Reuters.

The results are another sign that parts of the tech industry are emerging from the recession. Last month IBM reported its first quarterly revenue increase in more than a year, and said profits were up 10 percent from a year earlier.

HP suggested late last year that conditions were improving, when it raised its revenue target slightly for fiscal 2010. On Wednesday it raised the outlook again, this time by a larger amount. It now expects full-year revenue of $121.5 billion to $122.5 billion.

HP's PC business did well, with sales up 20 percent from a year earlier to $10.6 billion. Industry-standard servers also had a good quarter, with sales up 27 percent, helped by higher-priced configurations of HP's G6 Proliant servers.

"We haven't seen the kind of ASPs [average selling prices] we had in industry-standard servers for a long time," Hurd said on a conference call.

Printer shipments increased by 16 percent, the biggest increase at HP for three years, said Chief Financial Officer Cathie Lesjak. However, the company is still struggling with a shortage of laser printers, which looks set to continue for another quarter or two.

HP's services group, its second-largest after the PC division, saw declines in all areas. Hurd repeated what he said last quarter -- that HP sees a "strong pipeline" for deals -- but said the recovery in services spending will take longer than that for hardware. Last month IBM reported a 2 percent increase in revenue for its services business.

Other weak areas were storage, where revenue was down 3 percent, and "business critical systems," including HP's Integrity and Nonstop computing systems, where sales were off 22 percent from last year. That continues a trend away from proprietary high-end hardware and toward standard-based x86 systems.

On the whole, the HP executives were upbeat and clearly believe HP is positioned well for the economic recovery. The company is on track to close its 3Com acquisition by midyear, Lesjak said, which will broaden HP's menu of networking products.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags HPfinancial results

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

Cool Tech

Breitling Superocean Heritage Chronographe 44

Learn more >

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?