Hardware drives HP revenue up 13% to $30b

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.”

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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