H-P profit rises fourfold; sales up 7%

Slashdot It! Hewlett-Packard Co. late Thursday reported that quarterly profit rose fourfold from a year ago, when it booked a large restructuring charge, as customers shrugged off the company's corporate spying scandal and bought more of its printers and computers. HP said net income for the fiscal fourth quarter ended Oct. 31 rose to $1.7 billion, or 60 cents a share, from $416 million, or 14 cents, a year ago. Last year's results included $1.57 billion in restructuring charges. HP said net income for the fiscal fourth quarter ended Oct. 31 rose to $1.7 billion, or 60 cents a share, from $416 million, or 14 cents, a year ago. Last year's results included $1.57 billion in restructuring charges.

Revenue climbed just over 7% to $24.6 billion, up from $22.9 billion and more than the $24.1 billion expected by analysts.

H-P has seen stronger demand for its PCs as its cut prices to gain share against its chief rival, Dell Inc.

"H-P looks solid," said Shaw Wu, an analyst with American Technology Research who rates H-P shares neutral.

Excluding one-time items, H-P said it would have earned $1.9 billion, or 68 cents a share. By that measure, the company beat the average estimate of analysts surveyed by Thomson First Call, who expected 64 cents a share.

For its full fiscal year, H-P reported sales of $91.7 billion, pushing it past International Business Machines Corp (IBM) as the world's largest technology company in terms of revenue.

The company's shares have risen 40% this year, outpacing a 15% rise in the Dow Jones Industrials Average, as investors embrace the restructuring undertaken by Chief Executive Mark Hurd.

"This was a defining year for H-P," Hurd said on a conference call to discuss the results.

Hurd said H-P was "substantially done" with a company restructuring plan he announced in July 2005 that included cutting 15,000 jobs, or about 10% of H-P's worldwide workforce.

"The majority of the (restructuring) work is done," Hurd said. "We're in position to get that behind us."

Sales for H-P's personal systems group, which includes PCs, rose 10% to $7.8 billion, and the division posted an operating profit of $336 million.

Imaging and printing continued to be H-P's most-profitable business area, with $1.1 billion in operating profit on sales of $7.3 billion. Printer-supply sales, such as replacement ink cartridges, climbed 9%, while printer unit shipments rose 17% from a year ago.

"It looks like personal systems and imaging and printing were the source of upside surprises," said Wu, of American Technology Research.

Among its other business areas, enterprise storage and servers reported an operating profit of $502 million on sales of $4.7 billion, H-P services posted operating profit of $505 million with $4.1 billion in revenue, and software accounted for operating profit of $60 million on revenue of $349 million in sales.

For its fiscal first-quarter, H-P expects to earn between 55 cents and 57 cents a share, excluding certain items. Including those items, the company forecast a profit between 60 cents and 62 cents a share, in line with analyst estimates.

H-P forecast revenue in a range of $24.1 billion to $24.3 billion, higher than the $23.8 billion expected by analysts.

H-P shares rose more than 1% in after-hours trading after the results were released.