Hewlett-Packard Earnings, Revenue Rise and Top Forecasts
Hewlett-Packard reported results and an outlook that outstripped what Wall Street was expecting from the company, as strong server sales and a revival in its printing segment boosted results.
HP reported net income of $2.3 billion, or 96 cents a share, in its fiscal first quarter ended Jan. 31, up from $1.9 billion, or 75 cents a share, in the year-ago period.
Excluding items, it earned $1.10 a share, beating the average Wall Street estimate of $1.06 a share, according to Thomson Reuters.
Sales for the most recent quarter rose to $31.2 billion, up from $28.8 billion.
Its profitable printing business rebounded from a slump during the recession, with sales rising 4 percent in the fiscal first quarter, and supplies revenue growing 1 percent.
Strength also came from HP's server business, which is benefiting from an improved environment for corporate technology spending.
Collins Stewart analyst Louis Miscioscia said the hardware business outperformed his expectations.
"IT (information technology) is starting to come back. We're seeing it right now in the numbers here. I think 2010 is going to be a good year for tech," he said.
"Most of our segments saw very good growth," HP Chairman and CEO Mark Hurd told CNBC, noting that the company's server business grew 27 percent, its personal computer business 20 percent and its printer unit 16 percent. "We saw good sequential improvement, and good year-over-year improvement in Asia."
For 2010, HP forecast earnings excluding items of $4.37 to $4.44 a share, on revenue of $121.5 to $122.5 billion.
"I think we gained a lot of share in our core segments, we feel well positioned for 2010, and I think those will be the core things you’ll see," Hurd said.
HP shares edged about 1 percent higher in extended trading Wednesday. Get after-hour quotes for Hewlett-Packard here.
The stock finished the regular New York Stock Exchange session up 1.4 percent at $50.15.
HP generates more than three-fifths of its revenue internationally, and the company said sales from fast-growing emerging countries Brazil, Russia, India and China leaped 41 percent from a year earlier.
Chief Financial Officer Cathie Lesjak also said strength in the quarter was led by the company's hardware businesses: printers, servers and PCs. Personal computer revenue in China alone nearly doubled in the quarter, she added.
"We executed very well, especially in the hardware business," Lesjak said in an interview. She said the technology upgrade cycle was beginning, and businesses are beginning to spend to upgrade aging equipment.
"I do think it's getting underway," she said.