Despite a still weak PC and printer environment, Hewlett-Packard CEO Mark Hurd said the company will be an early beneficiary of an economic turnaround. Q3 revenues were down 3pc to US$27.5bn.
In its third quarter results HP said that operating profits fell 14pc to US$2.2bn compared with last year. Earnings per share in Q3 were US$0.67 a share.
However, cash flow from operations of US$3.9bn was up 15pc on last year.
The company recorded a record services profit of US$1.3bn.
“HP’s performance this quarter is a result of our strong business portfolio, efficient cost structure and scale. We made positive gains in extending our market leadership in key segments and strengthening our competitive position,” said Mark Hurd, HP chairman and chief executive officer.
“Business is stabilising, and we are confident that HP will be an early beneficiary of an economic turnaround and will continue to outperform when conditions improve.”
Looking ahead to the critical fourth quarter HP expects fourth quarter revenue to be up approximately 8pc on Q3. Fourth quarter earnings per share is expected to be approximately US$1.12.
“Record profit in Services, double-digit revenue growth in China, and solid cash flow demonstrate HP’s ability to execute,” said Cathie Lesjak, HP executive vice president and chief financial officer.
“We are investing for the future and executing operational efficiencies with the goal of driving long-term, profitable growth.”
Revenue grew 8pc in the Americas to US$12.6 billion. Revenue declined 12pc in Europe, the Middle East and Africa and 4pc in Asia Pacific to $9.9 billion and US$5.0 billion, respectively.
Services revenue increased 93pc to US$8.5 billion due primarily to the EDS acquisition. Infrastructure Technology Outsourcing posted revenue of $3.9 billion while Technology Services, Application Services and Business Process Outsourcing posted revenue of $2.4 billion, $1.4 billion and $711 million, respectively.
Enterprise Storage and Servers (ESS) reported total revenue of US$3.7 billion, down 23pc.
HP Software revenue declined 22pc to $847 million. Business Technology Optimization declined 22pc, and Other Software revenue declined 23%.
Personal Systems Group (PSG) posted an increase of unit shipments of 2pc and maintained the leading market position in PCs worldwide. PSG revenue declined 18pc to $8.4 billion. Notebook revenue for the quarter was down 10pc, while Desktop revenue declined 26pc.
Imaging and Printing Group (IPG) revenue declined 20pc to $5.7 billion. Supplies revenue was down 13pc due in part to continued channel inventory realignment, while Commercial hardware revenue and Consumer hardware revenue declined 37pc and 21pc, respectively.
Printer unit shipments decreased 23pc, with Commercial printer hardware units down 42pc and Consumer printer hardware units down 16pc.
HP Financial Services (HPFS) reported revenue of US$670 million, down 1pc from the prior-year period.
By John Kennedy