HP shows signs of recovery

HP chief executive Mark Hurd is confident of solid growth

HP has reported a seven per cent increase in revenue in the past quarter year-over-year to $22.9bn. Net earnings in the quarter ending 31 October declined to $416m as a result of $1.1bn in restructuring and amortization charges.

The printer and computer maker showed strong growth in the client computer market, with a sales increase of nine per cent to $7.1bn. Notebook sales increased 23 per cent.

In the computer market HP appears to be turning the tide in the battle against its main rival Dell, which in the past quarter reported a sales decline from $5.2bn to $5.1bn.

HP's printer business increased sales by only four per cent to $6.8bn and reported a drop in earnings. Unit shipments grew eight per cent, however, which is an important indicator of future sales.

HP has adopted a strategy of selling discounted printers to drive sales of ink and toner.

"We are focused on driving unit growth of high ink-consumption units and are confident that this will drive solid supplies growth," HP chief executive Mark Hurd said in a conference call with reporters.

The company has laid off an additional 800 employees on top of the 14,500 announced last summer. Hurd maintained that the additional cuts are a result of the model that the company used in its restructuring, and do not represent a new restructuring.