Notebooks lead HP revival as Q2 income hits $US1.5bn
- 24 May, 2006 09:59
NEW YORK: Sales of notebook computers helped drive HP's second-quarter net income to $US1.5 billion from $US1 billion in the same period of last year, the company said.
The company recorded Q2 revenue of $US22.6 billion to April 30, up from $US21.6 billion revenue in last year's second quarter.
Excluding certain items, HP had operating profit of $US1.8 billion, up from $US1.3 billion in the same quarter last year. It estimated third-quarter revenue would be about $US21.8 billion, with full fiscal year predicted to reach $US91 billion.
Notebook revenue rose 27 per cent over the second quarter of last year, while desktop revenue was up just 1 per cent.
The Personal Systems Group, which includes PCs and handheld devices, had operating profit of $US248 million, up from $147 million in the same period of last year.
HP's earnings come on the heels of a warning from a major PC rival. Dell recently lowered its first-quarter forecast to revenue of $US14.2 billion, compared to its earlier forecast of $US14.2 billion to $US14.6 billion. Although Dell still ships the most PCs worldwide, it lost market share to HP this year, according to IDC analysts.
HP president and CEO, Mark Hurd, who took the helm at HP in April of last year following the February ousting of Carly Fiorina, has embarked on a massive restructuring that involves major consolidation of its data centres and IT sites worldwide as well as thousands of layoffs.
HP cut 1600 jobs this quarter, bringing the total cuts so far as part of its restructuring to 8100, which is a little more than half the total number expected. The majority of the remaining job cuts would come out of Europe, Hurd said.
Revenue for HP's crown jewel, its Imaging and Printing Group, grew 5 per cent to $US6.7 billion, driven by a 10 per cent increase in printing supplies sales, which offset an 8 per cent dip in consumer hardware sales from the same period last year. Operating profit for the group reached $US1 billion from $US814 million in the year-ago quarter.
The vendor's Enterprise Storage and Servers unit saw a 2 per cent revenue rise to $US4.3 billion, led by a 60 per cent revenue jump in blade server sales. Operating profit rose to $US322 million from $US180 million from the year-ago quarter.
Software revenue rose 20 per cent year-over-year to $US330 million. Operating profit was $US3 million, compared to a loss of $US2 million.
But services revenue dipped 2 per cent to $US3.9 billion. Operating profit, however, rose to $US345 million from $US292 million.
Geographically, HP's revenue rose in the Americas and Asia-Pacific, offsetting a 2 per cent revenue decline in Europe, the Middle East and Africa.