Hewlett-Packard on Monday reported a 14% jump in quarterly profit solidifying its position as a leader in PCs, printers and signalling a serious threat in its new key area of activity - - technology services. Earnings were also boosted by cost-cutting as revenues fell 8.4%.
HP's results contrasted with Dell's 54% drop in profit, which it announced last week.
HP reported income for the period ended Oct. 31st of $2.41 billion, or 99 cents a share, up from $2.11 billion, or 84 cents a share, in the year-earlier period. Revenue declined to $30.77 billion from $33.6 billion.
The results included a 48% jump in operating profit to $1.4 billion for its services businesses, reflecting cost cutting following its $13 billion acquisition of EDS (Electronic Data Systems) last year.
“HP’s solid performance in Services drove record profit, and the accelerated pace in signings creates strong momentum going into 2010,” said
Mark Hurd, chairman and chief executive officer, HP. “Our operational execution and improving cost structure generated strong quarterly and year-end results. We expect to outperform the market due to our significant scale, broad portfolio and market-leading position.”
Fourth quarter revenue declined 3% in the Americas to
$13.6 billion. Revenue was down 17% in Europe, the Middle East and
Africa and 1% in
Asia Pacific to
$11.7 billion and
$5.4 billion, respectively.
“Relentless focus on driving efficiencies across the business has given HP a significant competitive advantage,” said
Cathie Lesjak, executive vice president and chief financial officer, HP.“Our skill in executing strong acquisitions and integrating them seamlessly improves the value of our portfolio, strengthens the business and contributes to our ability to expand in key growth markets in the future.”
Net revenue for the full fiscal year 2009 was
$114.6 billion, down 3% compared with the prior-year period or up 1% when adjusted for the effects of currency.
Lesjak said on a conference call that HP is about one-third of the way toward finishing a plan to remove $3 billion in annual cost from the EDS business. She also said the EDS unit has begun to generate sales of equipment like PCs, though the results of such sales weren't significant last quarter.
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| The garage in Palo Alto, California, where Stanford University classmates Bill Hewlett (1913-2001) and Dave Packard (1912-1996) founded HP in 1939. |
HP said it expects revenue of $118 billion to $119 billion for the 2010 fiscal year, up from a prior projection of $117 billion to $118 billion.
Results detail
IT research firm Gartner said on Monday that worldwide PC shipments will total 298.9 million units in 2009, a 2.8% from 2008. In 2010, PC shipments are projected to reach 336.6 million units, a 12.6% increase over 2009. However, Gartner says the market value of global PC shipments is now forecast to total $217 billion in 2009, a 10.7% decline from 2008. The firm is projecting the market value of PC shipments to reach $222.9 billion in 2010, a 2.6% increase over 2009.
