HP profits jump on renewed PC buying

HP has reported strong PC sales as businesses refresh hardware

HP has reported a 13 per cent rise in quarterly sales to more than $30bn (£21bn) after strong PC buying from businesses and consumers.

The company beat analyst expectations with growth in its PC business of 21 per cent. Desktop revenues rose by 27 per cent and notebooks by 17 per cent, although portable computers make up more than half of the company's sales.

"HP drove double-digit revenue growth and improving profits, contributing to our 20th consecutive quarter of year-over-year operating margin expansion," said Cathie Lesjak, chief financial officer at HP.

"With the improving demand environment, we are accelerating investments for growth while raising our full-year outlook."

Developing markets made a particularly strong showing in the PC sector, especially China, Russia, India and Brazil.

HP's Enterprise Storage and Servers uint had an excellent quarter with revenues up by 31 per cent. Blade revenues rose 45 per cent and industry standard server sales rose 56 per cent.

The printing division showed more modest growth, with sales revenue up by eight per cent, but this was largely driven by the consumer market. Business printing hardware sales fell by eight per cent over the quarter.

HP's services arm also had a poor quarter, with revenues up by just two per cent, and a fall in demand for application services.

HP chief executive Mark Hurd also told reporters of the company's plans for recently acquired Palm.

HP will invest heavily in Palm, he said, with the aim of building tablets running the operating system and using elements of the software environment to support web-connected printing.