PC Group Buoys HP Earnings

By Jeffrey Burt  |  Posted 2003-02-25 Print this article Print

Net earnings for the quarter were $721 million, a significant boost over the $390 million garnered last quarter.

Hewlett-Packard Co. posted first-quarter revenues of $17.9 billion, a 1 percent drop from the $18 billion it garnered in the fourth quarter. However, the Palo Alto, Calif., company—still working to integrate Compaq Computer Corp. into the fold—saw its PC division earn $33 million in the quarter ended Jan. 31, a strong turnaround after a fourth quarter in which the Personal Systems Group lost $68 million. Revenue in that division was $5.1 billion, a 2 percent jump from the previous quarter.
Overall, net earnings for the quarter were $721 million, a significant increase over the $390 million garnered last quarter.
"HP is making good progress against the backdrop of a challenging environment," Chairman and CEO Carly Fiorina said during Tuesdays earnings call. Fiorina said that year-to-year earnings comparisons are not reliable right now because at this time last year, HP and Compaq were separate companies with different product lines. However, sequential growth comparison "shows how were doing against our competitors. Overall, we like what were seeing." She pointed out that HP regained the top PC vendor spot in the fourth quarter, and that it grew its top share of overall server shipments to 30 percent. Fiorina said that IT spending in the United States and Japan was down, but that the European and Asian markets saw revenue growth for the quarter. She also said HP saved $734 million due to the integration of Compaq, up from $482 million in the previous quarter. The companys Enterprise Systems Group generated $3.7 billion in revenue, a drop of 6 percent from the fourth quarter. Company officials pointed to soft demand in the United States and Latin America as key reasons. Revenue for the Imaging and Printing Group was a flat $5.6 billion, while the Services unit generated $3 billion in revenue, a 3 percent drop.

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