Hewlett Packard (HP) came out slightly ahead of Wall Street's expectations on Wednesday, despite seeing its first quarter earnings fall by 10 per cent.
The hardware supplier's revenue for the quarter ending 31 January grew by 14 per cent to $11.7bn, compared with the same period last year. Before one-time charges, HP earned 80 cents for every diluted share. Analysts polled by First Call had predicted earnings of 78 cents a share.
Including charges, HP reported profit from continuing operations of $794m or 77 cents a share compared with profit of $882m or 85 cents a share in the same period in 1999.
The charges result from the realisation of the company's stock appreciation rights and the spinning off of its medical equipment and electronic measurement business into a new company, Agilent Technologies. This took place in November in a $2.2bn initial public offering.
While HP tries to sell more PCs and servers, the printer business continues to be the company's most profitable. Sales of ink jet and laser printers and corresponding supplies and services grew by 13 per cent over last year, compared with 1998.
This market also accounts for the majority of HP's profits, according to the company's annual report which was released last month. The computer business accounts for less than one quarter of HP's operating profits.
Carly Fiorina, HP's president and chief executive, said growth at the printer division was achieved despite obstacles. "We prevailed in spite of higher than expected memory costs, unfavourable Yen effects in the laser printer market, product transitions and softness in some markets," she said.
Fiorina is optimistic about HP's future. "We have a wealth of exciting product introductions and innovations to fuel our e-services, computing and digital imaging businesses. Our internet deals are real and growing," she said.
Some analysts seem to agree, and predict that HP will attain its goal of boosting revenue by 12 to 15 per cent over the coming year.
HP's stock price rose by $3.31 per share to close at $128.06. The earnings report came after the close of trading Wednesday, but shares were trading at about $129 in after hours activity.
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