Hewlett-Packard Co.'s (HPQ) fiscal second-quarter profit grew
28% on higher world-wide sales and profit growth in the company's
core PC business, where shipments jumped.
Shares rose 1.8% to $47.65 in after-hours trading.
H-P has weathered the recession better than some of its
competitors, and the latest results highlight how the PC market is
benefiting from strong consumer demand and a big push in the
corporate sector to replace aging machines. Last month, Gartner
Inc. (GT) said world-wide PC shipments jumped a
strong-than-expected 27% in the first quarter, with H-P remaining
the market leader, although it continues to face pressure from its
Asian rivals.
Looking ahead, H-P sees third-quarter earnings of $1.05 to $1.07
a share on revenue of $29.7 billion to $30 billion. Analysts polled
by Thomson Reuters expected $1.06 and $29.72 billion, respectively.
For the year, the company sees earnings of $4.45 to $4.50, up from
its February view of $4.37 to $4.44, and expects revenue to rise 8%
to 9%, up from its earlier view of an increase of about 6% to
7%.
For the quarter ended April 30, the world's largest maker of
personal computers posted a profit of $2.2 billion, or 91 cents a
share, up from $1.72 billion, or 71 a share, a year earlier.
Excluding charges related primarily to restructuring and
acquisitions, earnings rose to $1.09 from 86 cents. Revenue climbed
13% to $30.85 billion.
In February, the company estimated earnings of $1.03 to $1.05 on
revenue of $29.4 billion to $29.7 billion, above analysts' estimate
at the time.
H-P's operating margin grew to 9.3% from 8.4%. In the face of
falling PC prices, H-P has tried to maintain its profit margin by
putting the squeeze on suppliers.
Revenue increased 11% in the Americas, and grew internationally,
including a 19% jump in Asia Pacific. Revenue from outside the U.S.
accounted for 66% of the total.
Profit at the core PC business climbed 23%, while the segment's
unit shipments grew 20%, "maintaining the leading market share
position in PCs worldwide," according to H-P. Notebook and desktop
revenue each jumped by double digits.
Revenue at H-P's printer unit, which has concerned some analysts
as consumers and businesses scale back, rose 8%, while profit
improved 2.2%. Printer revenue has stabilized recently, although
consumers seem to be printing less than in the past, relying
instead on websites to share photographs.
Last month, H-P announced plans to acquire Palm Inc. (PALM) for
$1.2 billion. Several analysts said the deal made sense for the
long term, but noted that the price looked expensive considering
the fact that Palm is losing money and having trouble selling its
latest smartphones.
-By John Kell, Dow Jones Newswires; 212-416-2480; john.kell@dowjones.com