EDS deal and laptop sales boost HP results

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HP has delivered upbeat results for its fourth financial quarter ending 31 October, the highlight of which was a 19 per cent jump in revenue.

The two best performing areas of its business were in response to ongoing high demand for laptop PCs, blade servers and the positive acquisition of EDS this summer.

The IT giant announced preliminary results last Friday and its shares have been buoyed by around 22 per cent since.

But behind the headlines, printer and desktop PC sales slowed, while enterprise hardware business results were inconsistent.

Overall, revenue was $33.6 billion (£22.10 billion), up 19 per cent year-on-year or up five per cent excluding the effect of the EDS acquisition. Net profit was $2.1 billion (£1.28 billion), down $100 million (£65.7 million) compared to the same quarter last year.

Mark Hurd, HP chairman and chief executive told journalists in a conference call to discuss the results: “We believe that we held or gained share in every segment.”

He argued HP’s global reach and diverse portfolio would minimise any adverse affects of the current economic climate. But he was still cautious looking ahead. “We think it will be a challenging environment and we're planning as such,” he said.

While its PC business grew revenue by 10 per cent to $11.2 billion (£7.37 billion), a 21 per cent increase in laptop sales was tainted by a two per cent drop in desktops.

Its imaging and printing business declined one per cent to $7.5 billion (£4.93 billion), even though printer ink and sales of other supplies rose nine per cent. Printer hardware sales slumped by 21 per cent to consumers and 10 per cent to businesses.

Revenue in the storage and servers division dropped one per cent to $5.1 billion. While HP’s storage and blade servers did well, the firm said revenue from industry standard and high-end servers declined.

And its services division revenue almost doubled to $8.6 billion (£5.65 billion), mostly as a result of the EDS buyout. But software revenue also increased 13 per cent to $885 million (£582 million).

It said it had also been on a cost-cutting exercise, trimming its research and development budget, in addition to the job cuts it had already announced.

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