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PCs, laptops and commodity servers in high demand, but IT giant’s software and services revenue still languishing 

Hewlett-Packard’s revenue grew 13% year-on-year to $30.8 billion in its most recent financial quarter, the company revealed today. Net earnings for the period were $2.2 billion, up 28% from the year before.

The revenue growth was driven mostly by demand for hardware. Revenue from the company’s Personal Systems Group, which sells PCs and laptops, rose 20% to $10.0 billion. This division’s sales to businesses grew 19% year-on-year, while sales to consumers grew 25%.

Sales by the Enterprise Storage and Servers division shot up 31% to $4.5 billion. A 17% decline in sales of HP’s ‘Business Critical Systems’ – i.e. high cost, high availability servers – offset a 54% increase in commodity server sales

The services division grew sales by only 2% year-on-year to $8.7 billion. Some IT outsourcing growth was counterbalance by flat business process outsourcing (BPO) revenues, the company revealed. HP Software, meanwhile, saw sales decline 1% to $871 million.

The profit picture was a little different. As ever, the Imaging and Printing Group – which sells HP’s printer cartridges – was an important source of income, delivering an operating profit of $1.1 billion.

But the services division, despite sluggish revenue growth, saw its operating profit jump 16% year-on-year to $1.4 billion. CEO Mark Hurd explained this effect in conference call with investment analysts: “We have spent a lot of time over the past year and a half really operationalising the [services] business, getting underneath issues in the business, opportunities in the business. And I think the team for the most part has done a very good job. We certainly improved our profitability, improved our cost structure, and better aligned our costs with our revenue.”