HP posts rise in fourth-quarter sales

24 Nov 2008 22:50

Despite profits falling slightly, CEO Mark Hurd said he is confident the company can weather the economic storm

HP on Monday announced it recorded $33.6bn (£22.1bn) in revenue during the fourth quarter of 2008, up 19 percent from a year ago, or 16 percent when adjusted for currency effects.

HP's profit was $2.1bn, or 84 cents per share, down slightly from $2.2bn a year ago, although up from 81 cents per share.

The company pre-released its results last week. The results are a rare piece of good news for the PC industry, which is expected to bear the brunt of the downturn in the tech industry.

On a conference call with reporters on Monday, chief executive Mark Hurd said he remained confident in his company's ability to successfully weather the global economic crisis.

HP will "gain share, expand earnings and emerge from the current environment in a meaningfully stronger position", Hurd said.

However, "the macroeconomic environment will remain challenging", he said.

Unlike rival Dell, whose sliding profits were announced last week, HP said that, although it is always looking at ways to save money, such savings are not likely to come from layoffs.

"We'll get through this period without losing any muscle in the organisation," Hurd said. He also predicted that the company would continue to hold steady in its market-share positions in all its businesses, even through the current economic climate.

HP's core PC-business revenue grew 10 percent to $11.2bn, and shipments increased by 19 percent. Notebooks were primarily responsible for the business unit's success, as revenue for the quarter grew 21 percent. Desktop revenue declined by two percent.

Hurd said the outlook for the PC industry continues to be "challenging", and the company is bracing itself. But he said there won't be any "extraordinary" changes in prices in the near term.

In its printer business, the company reported a one percent drop in revenue. Hurd said that was a result of HP's largest clients delaying purchases of new equipment.

"People are holding onto existing products longer. We're fine with that," he said. "Supplies revenue is good [up 9 percent year over year]... People are still printing."

HP also finished the integration of its EDS purchase during the quarter. As such, HP Services revenue increased 99 percent to $8.6bn. Of that, $3.9bn came directly from the EDS acquisition, between the 26 August takeover date and the final day of the quarter. Excluding EDS, services revenue grew 10 percent.

HP's shares were down to $35.39, a drop of 0.87 percent, in after-hours trading on Monday.

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