Hewlett-Packard posted a solid quarter result across all of its business units. The announcement calmed concerns of a possibly weak performance, after IBM had reported a disappointing quarter result.
Quarter revenue was up seven percent to 21.6 billion year-over-year while earnings climbed 9 percent from $884 million to $966 million in the same time frame.
Newly appointed Chief executive Mark Hurd described the result as "solid", but mentioned that "overall performance leaves room for improvement in many of our businesses."
HP’s personal computer group achieved sales growth of 6 percent to $6.4 billion, with unit shipments increasing by 12 percent. The imaging and printing group gained 5 percent to $6.4 billion and a unit shipment increase of 13 percent. According to HP, color laser unit shipments increased 96 percent year-over-year.
The storage and server group reported 6 percent growth to $4.2 billion while the services business posted a 14 percent sales increase to $4.0 billion. Software revenues climbed 23 percent to $277 million.
The firm’s balance sheet confirms a growth path, but also reveals that the company was not able to translate much of its revenue increase into additional earnings. Almost all of new revenues were eaten up by substantially higher cost of revenue, which climbed from $18.8 billion one year ago to now $20.4 billion.
Looking at the past six months and the comparable period one year ago, revenues increased from $39.7 billion to $43.0 billion, but cost of revenue climbed by $3.4 billion from $37.3 billion to $40.7 billion in the same time frame. There is no doubt that Hurd will look for ways to make revenue increases more efficient in the future. (THG)