Hewlett-Packard admitted it was "disappointed" with third quarter results as revenue increases failed to translate to a big profits jump.
Chief executive Lew Platt said results for the third quarter ended 31 July were mixed, with increasing costs keeping profit growth below expectations despite a 15 per cent increase in net revenue.
Although technically profits grew by 45 per cent to $617 million year on year, the 1996 quarter was dragged down by costs associated with exiting the disk mechanism sector. Had it not been for those costs the year before, profit growth would have only hit 11 per cent.
"On the positive side, we're pleased with our strong comeback in order and revenue growth, driven by excellent acceptance of new products and services. PCs, hardcopy supplies and semiconductor test equipment were among the areas that achieved outstanding increases," said Platt.
Net revenue in the computer business increased 17 per cent over the same period last year to $8.7 billion. Sales were particularly strong in the server business, said the company.
However, revenue was down in the medical equipment business, while costs overall increased faster than in recent quarters.
"While net earnings improved over last year's weak third quarter, we're disappointed with our profit outcome," said Platt.
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