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Hewlett Packard reported a profit that rose over last year and beat analysts' forecasts by 3 cents a share on strong international sales in its notebook computer and printer businesses. Revenue also topped expectations.
Excluding one-time items, the personal computer and printer maker reported a profit of 86 cents a share on sales of $28.03 billion in its fiscal third quarter, against earnings of 71 cents a share on sales of $25.377 billion last year.
HP was expected to earn 83 cents a share on $27.406 billion, according to a group of analysts surveyed by Thomson Reuters.
Shares of HP popped about 4 percent higher in extended trading. The stock [HPQ
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Including charges and other one-time items, HP's earnings rose 14 percent: It earned $2.03 billion, or 80 cents per share, in the May-July period. That's up from $1.78 billion, or 66 cents per share, a year earlier.
The Palo Alto, California-based company forecast fiscal fourth-quarter profit, excluding items, of $1.01 to $1.03 a share, ahead of the average analyst view of $1 a share. The company forecast revenue of $30.2 billion to $30.3 billion, slightly behind the average forecast of $30.4 billion.
"Overall its a good report but I believe the outlook still remains cloudy. As far as the outlook goes, they're going to obviously see some impact from the rising dollar," said William Rutherford, president of Rutherford Investment Management. "That is going to influence their overseas revenue and will have some impact on their bottom line going forward, but it's difficult to assess."
Revenue from outside the United States accounted for 68 percent of the total. Adjusted for currency exchange rates, Europe, Middle East and Africa revenue rose 5 percent and Asia Pacific revenue rose 8 percent. Revenue in the Americas rose 3 percent. (See more in the accompanying video.)
Despite 3 percent U.S. growth in the third quarter, Chairman and Chief Executive Mark Hurd told reporters on a conference call that this was better than the company had expected, and marked a pickup from its second fiscal quarter.
HP and other PC makers have been depending on strong overseas growth as U.S. performance has lagged because of wider economic troubles.
European technology spending has been "more of a mixed bag," Hurd said, but added that the company has seen some surprising growth in some markets in the region.
Revenue in the personal systems group rose 15 percent to $10.3 billion, with unit shipments up 20 percent from last year. Notebook revenue grew 26 percent from last year, while desktop revenue rose 6 percent.
Commercial computer revenue in the group grew 15 percent and consumer computer revenue grew 17 percent.
"Very strong results and strong guidance. This is impressive, in light of the stronger U.S. dollar, which has been more of headwind to their business as opposed to a tailwind. That's the big takeaway," said Shaw Wu, an analyst at American Technology Research.
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AP Hewlett Packard headquarters in Palo Alto, Calif. |
Imaging and printing revenue grew 3 percent. Enterprise storage and servers revenue rose 5 percent. Services revenue rose 14 percent, while software revenue rose 29 percent and financial services revenue rose 17 percent.
HP shares fluctuated during its fiscal third quarter, declining about 7 percent over the period.
HP stole the title of world's No. 1 manufacturer of personal computers from Dell two years ago, but is fighting hard to keep it as Dell [DELL
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- Wire services contributed to this report.
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