Hewlett-Packard reported solid financial results for its fiscal first quarter, driven by growth in PCs and enterprise hardware. The results prompted HP to raise its forecast for the year ahead.
Revenue for the quarter, which ended Jan. 31, was $US28.5 billion, up 13 per cent from a year earlier, HP announced Tuesday. Pro forma net income was $2.3 billion, or $0.86 per share, up from $1.8 billion, or $0.65 per share, a year earlier.
The figures beat the expectations of financial analysts, who had forecast revenue of $27.6 billion and pro forma earnings per share of $0.81, according to Thomson First Call. The pro forma figure excludes one-time items that slightly inflated the results. Using generally accepted accounting principles, HP's profit was $2.1 billion, or $0.80 per share.
HP's Personal Systems Group, which produces its laptop and desktop PCs, grew its revenue 24 per cent from the same period a year earlier, to $10.8 billion, with unit shipments up 27 per cent. Notebook sales climbed fastest, up 37 per cent, while desktop sales climbed 15 per cent.
The division had already been doing well. HP extended its lead over Dell in PC sales last year, according to figures from Gartner. HP ended the year with 18.2 per cent of the market, compared with 14.3 per cent for Dell. The PC market overall grew 13.4 per cent.
HP may find it hard to sustain that growth rate, in part because it has to make comparisons with increasingly successful quarters in the year before, CEO, Mark Hurd, said on a conference call. Still, Hurd said, "when you look at 24 per cent growth, I think that's pretty darned strong."
HP's imaging and printing group performed slightly less well, with revenue climbing 4 per cent to $7.3 billion. Printer unit sales declined by 1 per cent from a year earlier, thanks to weakness in the consumer market. Revenue from supplies, which includes HP's profitable ink business, climbed 6 per cent, however.
Revenue from the servers and storage group climbed 9 per cent to $4.8 billion. Sales of blades and industry-standard servers were strong, while HP's PA-RISC and Alpha chip businesses continued to shrink. Services revenue climbed 11 per cent year-over-year to $4.4 billion, while software sales climbed 11 per cent to $666 million, HP said.
Hurd said he was pleased with the results overall. He attributed them to successful cost-cutting efforts, the addition of 2,000 new HP sales staff in the past year, and a diverse product portfolio.
HP generates an increasing amount of its business overseas, he said. Its biggest market continued to be Europe, the Middle East and Africa, where revenue grew 15 per cent to $12.3 billion. Asia-Pacific revenue climbed 22 per cent to $4.9 billion. Growth in the Americas was a sluggish 8 per cent, generating $11.2 billion.
"We generated 69 per cent of our revenue outside the US, with emerging markets driving significant growth," Hurd said.
The company now expects second-quarter revenue of $27.7 billion to $27.9 billion, and pro forma earnings per share of $0.83 or $0.84. That's above what analysts polled by Thomson had been estimating: pro forma profit of $0.82 and revenue of $27.4 billion.