Ongoing cost-cutting measures at Hewlett-Packard continue to make their quarterly earnings a cheerful affair for stockholders — although probably not for the 15,000 former employees sacrificed since 2005 to buoy profits.
The largest PC vendor's fourth quarter results beat analyst expectations today, and the company offered a solid outlook for the next quarter.
"We are effectively balancing our growth, investments and cost reduction initiatives" said CEO Mark Hurd during an investor conference call today. "While our fourth quarter results showed marked improvement, we still have work to do and investments to make."
Net revenue for the quarter was $28.3bn, up 15 per cent from $24.6bn a year earlier. Analysts were expecting revenue to land around $27.5bn.
Meanwhile, the Q4 operating profit was up 38 per cent year-over-year to $2.6bn.
"Strong performance across our businesses was highlighted by sharp improvements in our software segment," elaborated Hurd.
HP software revenue doubled over the prior-year period to $698m. The company said growth was led by the businesses acquired in their purchase of Mercury Interactive last year.
Notebook revenue grew 49 per cent year-over year to $5.16bn. Desktop revenue made a smaller jump of 15 per cent from last year to $4.2bn.
HP's server biz grew 10 per cent year-over-year to $5.2bn. Sales of x86 systems increased 14 per cent, while x86 blade revenue leaped 78 per cent. Storage revenue grew 7 per cent.
The imaging and printing group revenue grew 4 per cent year-over-year to $7.6bn (or about the cost of five ink cartridges). HP relies heavily on the printing biz, which makes up around 29 per cent of sales.
HP estimates Q1 '08 revenue will be approximately $27.4bn to $27.5bn. The company also announced its board of directors have authorized an additional $8bn for future repurchase of shares of HP common stock. ®