HP has said in its quarterly financial report that it sees the technology market stabilising, but that Europe is still weak.

Overall profits fell 19 per cent for the quarter to $1.6bn (£973m). Revenues grew by eight per cent in the US, but fell 12 per cent in EMEA. Asian revenue was down two per cent, despite strong growth in China.

"I am pleased with our execution in a tough business climate," said HP chief executive Mark Hurd in a conference call. "The US market is now stable, but we have yet to seen the same in Europe. Meanwhile some areas, such as China, are seeing double digit growth."

The biggest, indeed only, growth sector for HP this quarter was the services market, where sales rose 93 per cent to $8.5bn (£5.2bn). This was primarily down to EDS, which Hurd described as making "excellent progress", adding that there are still cost savings to be made in that division.

The PC market fared less well, with sales revenue falling 18 per cent despite a two per cent growth in shipments. Desktop PC sales fell 26 per cent, while notebook sales fell by 10 per cent.

Server revenue was down 23 per cent, and storage revenue fell by 21 per cent. Despite this the storage and servers division made a profit of $356m (£216m).

HP's printing division also suffered, according to the report. Commercial and consumer printing revenues fell 37 per cent and 21 per cent respectively, and commercial printing shipments fell by nearly half. However, Hurd said that customers had not cut back too much on the supplies side compared to last year.

But the continuing weakness of the European market will be a worry for some. Cathie Lesjak, HP's chief financial officer, said that the region still had some way to go before becoming a growth area for the company.

"Europe continues to be the most challenging region," she said. "The US continues to stabilise. While we would like to see more stabilisation in Europe, we are encouraged by US and China."