Hewlett-Packard follows other tech giants such as IBM and Intel in announcing solid quarterly financial numbers, with revenues that grew 8 percent and profits up 25 percent. HP reports continued strong demand in the consumer space and predicts that more businesses will refresh their desktops, notebooks and servers as the year rolls on.
Hewlett-Packard continued the trend of positive tech financial
news, with officials announcing quarterly revenue growth of 8 percent and
increasing their outlook for the current quarter and for the fiscal year.
In a conference call with analysts and reporters Feb. 17, HP
President and CEO Mark Hurd said the
company's consumer business in such areas as laptops grew, continuing a trend
that began in the second half of 2009. At the same time, he said, corporate
spending is beginning to show signs of life, causing growth in HP's server
business and some areas of its printer line.
In addition, Hurd said demand for storage products was high
enough that it was difficult for HP to meet it all, something he said the
company is working hard to correct.
Overall, Hurd said he was pleased with HP's position in the industry
and believes the determining factor will be the recovery in the economy.
"If the market does better, then we'll do better," he
said.
HP's positive earnings report followed those of other vendors,
including
IBM and
Intel.
For its first fiscal quarter, HP netted $2.3 billion on revenue
of $31.2 billion. During the same period the previous year, the company earned
$1.9 billion on $28.8 billion of revenue.
In addition, Hurd said the company was raising its revenue
projections for the second fiscal quarter to between $29.4 billion and $29.7
billion, and for the entire fiscal year to between $121.5 billion and $122.5
billion, up from previous estimates of $118 billion to $119 billion.
HP, the world's top PC vendor, saw a 26 percent jump in unit
shipments for the quarter, and revenue grow 20 percent to $10.6 billion. The
consumer client business grew 26 percent, while the commercial PC business
increased 16 percent.
Hurd said consumer purchases of PCs continued to be strong.
However, he echoed what officials with other tech vendors-such as Intel-have
said: They expect corporations to dive into the refresh cycle in the second
half of the year.
Driving that refresh cycle is not only the number of aging PCs,
but also such new factors as Microsoft's Windows 7 operating system and a host
of new processors from companies such as Intel and Advanced Micro Devices.
HP also saw strong growth in its x86 server business, with
industry-standard systems revenue jumping 27 percent and blade server revenue going
up 24 percent.
Again, Hurd said he anticipates that businesses, attracted to
potential TCO savings to be gained from HP's
portfolio of ProLiant G6 systems, will buy more new systems during 2010.
"We do see a pretty robust refresh cycle throughout the
year," Hurd said.
However, revenues in HP's storage business declined 3 percent,
and declined 22 percent in its high-end Business Critical Systems unit.
In its other businesses, HP saw a 4 percent revenue increase in
printing and imaging and a 1 percent drop in services. The software business
remained flat, at $878 million in revenue.
Hurd said HP's $2.7 billion deal to buy networking equipment
maker 3Com is still on track to close in the second quarter of 2010. The
European Commission approved
the deal Feb. 12; U.S.
regulators already had given the OK. There are a few smaller hurdles to clear,
Hurd said.
HP is looking to 3Com to bolster its ProCurve networking
business to help it better compete with Cisco Systems, not only in networking
but also in the increasingly competitive space of converged data center
solutions.
Hurd noted that since HP announced the deal in November, both
HP ProCurve and 3Com have seen a bump in their businesses.
"We think the leveraging of the two [will create] a very
powerful force in the industry," he said.
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