Hewlett-Packard Co on Tuesday reported quarterly profit rose 27 percent as the computer and printer maker saw record revenues in every business and every region and fixed problems with its server and storage unit, sending shares higher by 8 percent. The No 2 computer maker also backed analyst estimates for the first half of the company's 2005 fiscal year and Chief Executive Carly Fiorina said corporate demand strengthened and consumer demand moderated somewhat. "At this juncture what we are seeing is an improving enterprise market and a so-so consumer market," Fiorina said on a conference call.
HP rivals Dell Inc, the largest PC maker, and International Business Machines Corp, the No 1 computer maker, also both recently posted strong quarterly results, suggesting that technology spending may not be as middling as many have feared.
The shares rose as investors were surprised by the results and relieved that they had not missed its target again.
"The Street was very sceptical that Hewlett-Packard could even hit their revenue numbers," said Steve Neimeth, portfolio manager for AIG SunAmerica Mutual Funds, who oversees mutual funds owning 500,000 Hewlett-Packard shares. "Sentiment for this company has been extremely negative. The Street has been sceptical of Carly Fiorina. But she's proven once again that she can hit numbers."
HP said net income for its fiscal fourth quarter ended October 31 rose to $1.09 billion, or 37 cents per share, up from $862 million, or 28 cents per share, a year earlier. Revenue rose 8 percent to $21.4 billion.
Excluding items, Palo Alto, California-based HP posted a profit of 41 cents per share, compared with its previous forecast for a per-share profit of 35 cents to 39 cents.
On that basis, analysts had expected a profit of 37 cents per share, on average, within a range of 34 cents to 39 cents, on revenue of $21.2 billion, according to Reuters Estimates.