HP Posts Upbeat Earnings in Q4

UPDATED: Led by its printer and PC businesses, Hewlett-Packard on Wednesday reported increases in both revenue and income during the fourth quarter.

Led by its printer and PC businesses, Hewlett-Packard Co. on Wednesday reported increases in both revenue and income during the fourth quarter.

The Palo Alto, Calif., company earned $862 million during the three months ended Oct. 31 on revenue of $19.9 billion. The numbers were an increase over the $390 million in earnings and $18 billion in revenue during the same three months last year.

The Imaging and Printing Group saw record revenues of $6.2 billion, and the $6 billion in revenue for the Personal Systems Group was a 19 percent jump over the same period in 2002. In addition, the embattled Enterprise Systems Group, which includes servers and storage devices, returned to profitability after a disappointing third quarter, garnering $4.1 billion in revenue and a $106 million profit.

/zimages/3/28571.gifAt Comdex Las Vegas 2003 this week, HP announced it would return to the copier market. Click here for more information about the three new multifunction copiers.

Chief Financial Officer Robert Wayman said revenues for the current quarter will be between $19.1 billion and $19.5 billion.

Both Wayman, and Chairman and CEO Carly Fiorina said they expect enterprise IT spending to be moderate over the next year. That estimate was offered despite Waymans comment that HP is "assuming a decent economy next year." "While the enterprise environment is improving, it is slight. It is clearly improving less than the consumer market," Fiorina said. "Enterprises continue to be tight with the purse strings."

While businesses see the need to upgrade some IT resources, they also are finding more room for consolidating what they have, she said.

According to the company, it was a combination of streamlining the supply chain and manufacturing costs, and employee layoffs that helped the Enterprise Systems Group return to profitability. The $106 million profit was $235 million more than the previous fourth quarter, when HP was just months past its $19 billion acquisition of Compaq Computer Corp.

HP server shipments grew 28 percent from the previous fourth quarter, and midrange storage shipments jumped $10 percent. High-end storage shipments increase 14 percent, officials said. Sales of OpenView and OpenCall software increased 17 percent and 36 percent, respectively.

In the Personal Systems Group, officials credited notebook and desktop sales growth for the jump in revenues. Notebook sales increased 53 percent over the same period last year, while desktop sales increased 23 percent, they said. Sales of iPaq handheld devices doubled.

The Imaging and Printing Group saw profits exceed $1 billion for the first time, and the $3.2 billion in revenue garnered by HP Services represented a 5 percent increase over the previous fourth quarter.

/zimages/3/28571.gifClick here for information on HPs new pen-based forms data-entry technology introduced this week. Editors Note: This story was updated to include information and comments from a company press conference with analysts.