PCs, ink, servers - just about everything boosts HP's Q3
Enjoys top revenue rise since 2000
HP did its double-digit thing during the third quarter with software and PC gains boosting the bottom line.
The company's workmanlike - yeah, we used it - quarter resulted in a 16 per cent year-over-year rise in revenue to $25.4bn. Net income surged as well, rising 29 per cent to $1.8bn. That's a healthy chunk of change.
"We had our strongest revenue growth since 2000," said HP's CEO Mark Hurd, during a conference call.
Hurd didn't say a whole lot right after that, as HP's phone line to reporters and analysts died. After about five minutes, his Hurdness returned, saying "Telephonic technology has not quite caught with the opportunity here."
And here we thought the market for earnings conference calls was already well taken care of. But we digress.
HP's revenue and units grew in every year region. The company noted that it received a boost from low component costs and cited strong, broad demand for its sparkling third quarter.
HP's Personal Systems Group - the PC folks - grew revenue 29 per cent year-over-year to $8.9bn. As expected, notebooks did most of the hard work, as sales jumped 54 per cent. Desktop sales increased 12 per cent. All in all, PSG posted a $519m profit - up from $275m in the same period last year.
The Imaging and Printing unit boosted revenue 8 per cent to $6.8bn and turned in a $981m profit, up from $884m.
The server and storage teams did their part as well, hiking revenue 10 per cent to $4.5bn. Sales of x86 servers rose 16 per cent aided by a very robust 81 per cent rise in blade sales. Sales of Itanium servers rose 71 per cent, although high-end system sales dropped 3 per cent overall as PA-RISC and Alpha system sales continued to disappear. Meanwhile, storage revenue increased 6 per cent. Together, the server and storage group turned in a $464m profit - up 7.2 per cent.
The software group - aided by a string of acquisitions - upped revenue 74 per cent to $554m. This unit's profit came in at $81m - up from $13m last year.
HP's core services business grew revenue by 8 per cent to $4.2bn and posted a $430m profit, up from $364m. Financial services rose 12 per cent to $582m.
If you're looking for a big downside to the quarter, you won't find one.
Analysts, however, did try and go negative by asking Hurd if HP expects to be hurt by the recent turmoil in the US financial markets.
HP? Slowdown because of a wobbly US economy? Pah.
"We saw steady growth across all regions and all segments," Hurd said. "I don't have any data that would indicate to me any material change in demand."
Hurd also noted that he's not an economist.
"We have a lot more work to do at HP," Hurd said, returning to his favorite refrain. "We are anything but a finished product at this point."
HP is all about cutting more costs, improving its software business and selling the heck out of gear during its often large fourth quarter.
The company expects fourth quarter revenue to come in between $27bn and $27.2bn.
Shares of HP rose slightly in after-hours trading, following the release of the third quarter results.
Overall, we find an HP that's changed quite a lot. The company used to depend on the printing and imaging unit for its best quarters. Now, however, revenue and profits are well spread across all of the major businesses. Software remains the only real division that needs serious help, and HP has vowed to acquire its way into success there. ®
They make money on all that stuff stupid a lot of money
that makes them serious the last thing
thing the world needs is another IBM of which it already has
two. Ashlee is still a bonehead even a blind pig can find an
acorn once in a while HP's motto ought to be we don't suck
as much as Dell because thats how they made such a nice
quarter by not being quite as shoddy and poorly behaved
towards their customers (or quite as thieving and dishonest) as the other commodity box vendor. HP will self destruct too give it
I'm not sure HP is counting on the business of "Cobble-your-own" PC types to make its revenue goals.
That being said, when was the last time you cobbled your own printer or scanner?
I've had Laserjet IIIs I had to take outside and shoot in order to replace. Likewise, I gave up my 15-year-old HP scanner ONLY when I could no longer fit the ISA SCSI card in any new MOBOs.
Anyway, the downside of selling Consumer stuff is that it dilutes HP's image as an Enterprise-Class player such as IBM, Sun or EMC (when, in fact, HP is trumping both in growth.)
IBM was wise to dump the low-end off on Lenovo and concentrate on software and services where the real margin is. Maybe it's time for HP to spin off the cameras, injkjets and Walmart shelf-candy, and get taken seriously.
I'd not touch an HP PC with a long stick (but then I tend to cobble my own together so that's largely true of any off-the-peg PC really) and I have never touched Compaq... but my g/f had been wanting me to replace the printer since the heads went on our old Epson inkjet at home.
We don't use printers much so I just wanted to get something cheap-n-cheerful that'd do for a year or so. Got a little HP from Dabs (it was cheaper elsewhere, but Dabs allow for evening deliveries) for £40, was just expecting, well, a bog standard inkjet like my old Epson. But it's actually quite a nice little printer, with slots for various memory cards and USB ports so you can just chuck your camera or flash drive in without booting up the PC, if you want. The print quality isn't bad (once the magenta ink was flowing properly - took a couple of head clean runs) and it can (apparently) do photo printing, you can switch out the black cartridge for a photo-print one and use glossy paper.
I was actually quite impressed, possibly because I wasn't expecting much, but if HP can keep this up then they deserve to reap the rewards... not much of an advertising slogan though "HP - much better than I was expecting".