HP profits rise 18pc on cost-cutting measures

24 Nov 2009

US technology giant Hewlett-Packard (HP) has reported an 18pc rise in fourth-quarter profits as cost-cutting measures balanced out a fall in sales revenue.

HP saw net profits of US$2.4 billion in the three months to the end of September, up from a profit of US$2.1 billion reported in the fourth quarter of 2008.

However, fourth-quarter net revenue of US$30.8 billion was down 8pc on the same quarter a year earlier.

“HP’s solid performance in services drove record profit, and the accelerated pace in signings creates strong momentum going into 2010,” said chairman and chief executive officer of HP Mark Hurd.

“Our operational execution and improving cost structure generated strong quarterly and year-end results. We expect to outperform the market due to our significant scale, broad portfolio and market-leading position,” he added.

HP now estimates full-year 2010 revenue will be about US$118 billion – US$119 billion, up from its previous estimate of US$117 billion-US$118 billion.

Earlier this month, HP announced it is to acquire network system manufacturer 3Com in a deal worth US$2.7 billion. The firm has so far cut 2pc of its global workforce, or some 6,400 workers, this year.

HP’s positive results today contrast strongly with its rival Dell’s announcement of a 54pc drop in profit last week.

HP is often seen as a bellwether firm for the tech industry, given its broad product base.

Photo: Mark Hurd, chairman and chief executive officer of HP.

Article courtesy of businessandleadership.com