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HP reports strong first fiscal quarter

Hewlett-Packard (HP) has reported net earnings of $2.3bn for the first fiscal quarter of 2010, up 25% from a year earlier. Net revenues were up 8% at $31.2bn.

HP's strong performance, which exceeded market expectations, was driven by increased sales of PCs, printers and industrial servers.

The Personal Systems Group sales were up 20% to $10.6bn due to consumer demand for Microsoft's newly released Windows 7 operating system. Notebook revenue for the quarter was up 25%, while desktop revenue increased 16%.

Enterprise Storage and Servers reported total revenue of $4.4bn, up 11%. HP predicts Windows 7 will also spur enterprise demand in the second half of 2010.

"HP is well-positioned to outperform the market," said Mark Hurd, chairman and chief executive officer at HP. "The strength of our portfolio, leaner cost structure and accelerating market momentum give us the confidence to raise our full-year outlook."

Services revenue slid 1%, but HP's cost-cutting efforts enabled operating profit for the division of $1.4bn, up from $1.1bn the year before.

"Solid performance across the business and disciplined execution on our cost initiatives contributed to strong growth in cash flow," said Cathie Lesjak, executive vice-president and chief financial officer at HP.

"We will continue to invest for growth and leverage our scale and global position to take advantage of an improving demand environment, she said.

HP's financial report follows solid results from other big technology companies, giving ground for optimism in the sector, analysts said.


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