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HP’s Q3 profits up

Hewlett Packard Corp. has delivered another strong quarterly earnings performance with revenues growing at its best rate since the year 2000, Mark Hurd, HP’s CEO said during the company’s Q3 conference call.

During the third quarter, which is typically a slow quarter for the company, HP’s revenues grew 16% to $25.4 billion from $21.9 billion a year earlier.   In the year’s first nine months, revenue was up $8.9 billion to $76 billion and the company anticipates full year revenue of roughly $103 billion, representing more than $11 billion of new revenue this year.   

With regard to the company’s business units, HP’s personal systems group (PSG) which includes PCs, rose 29% to $8.9 billion. Notebook revenue grew 54%, desktop revenue grew 12% and workstations were up 30%.  PSG’s operating profit rose 89% to $519 million, or 5.8% compared to 4.0% a year earlier.

Results for HP’s imaging and printing business segment also increased with revenues up 8% to $6.8 billion. The unit’s operating profit was up 11% to $981 million, and operating margin improved to 14.5% from 14.2% a year ago. HP’s printer unit shipment grew 10% with over 13 million printer hardware units shipped in the third quarter.

In the enterprise storage and servers segment revenue grew 10% to $4.5 billion. Operating profit rose 57% to $464 million and profit margins improved to 10.2 % from 7.2% a year earlier.  Industry standard server revenue grew 16% and server blades grew 81% compared to the same quarter last year. 

In software HP’s revenue grew 74% compared to the same quarter last year to $554 million.

While Hurd said the company has a strong lineup of products and services and is competing in markets where there is growth, he also said there is substantial room for improvement.

“By the time you get to 2009 the IT market that HP competes for is greater than $1.1 trillion.  Today, as big as we are, we actually don’t compete for all of that market.  We still are under distributed and so we need more work with our partners.  We have about 140,000 partners in the world and we have a sales force that compliments and supports it.  We’ve got a lot more market to [go] after,” Hurd said. 

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