Hewlett-Packard Profits Rise to Nearly $1 Billion

Hewlett-Packard beat expectations with its quarterly earnings, suggesting the company is on steady footing three months after firing CEO Carly Fiorina. H-P posted a profit of nearly $1 billion in its last quarter, an increase of 9 percent over the same quarter last year. Revenue rose to more than $21 billion.

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RENEE MONTAGNE, host:

The latest earnings report from Hewlett-Packard suggests that company is having some success managing its many businesses. Three months after firing CEO Carly Fiorina, HP posted a profit that approached $1 billion in its last quarter. That was a 9 percent increase over the same quarter last year. Revenue jumped over $21 billion. From San Francisco, Jason Lopez has more.

JASON LOPEZ reporting:

Hewlett-Packard's new CEO, Mark Hurd, is considered a realist and a bit conservative. He said the company had a solid quarter but that it could have done better. Then Hurd lowered earnings expectations for the current May through July quarter, a move some have said ensures HP will overdeliver in its next earnings report come August. Still, Hewlett-Packard shows signs that a large technology company can prosper, even in segments like personal computers, which do not command the high profit margin.

Mr. MARTIN REYNOLDS (Gartner): The financial results we saw indicate that its PC division has returned to profitability.

LOPEZ: That's Gartner research analyst Martin Reynolds.

Mr. REYNOLDS: The server and storage business reported a profit, services reported a profit; printers, of course, as always, reported a profit; and even software was only $6 million negative, which is good for software. So the whole company is showing signs now of moving towards profitability.

LOPEZ: Hurd's disappointment in HP's performance may have been directed at the company's crown jewel, the printing division, which saw quarterly profit drop by $138 million to 814 million. Martin Reynolds.

Mr. REYNOLDS: The business of printers is that you don't make money on the printers. You make money on the ink. For HP to see that kind of reduction suggests that there's been some erosion in the consumables, which could be people, for some reason, are printing less. It could be that there's been a particularly great deal out there on new printers. Sometimes it's cheaper to buy a whole new printer than it is to buy ink.

LOPEZ: But a slowdown in HP's printer business may not really worry Mark Hurd, who builds his reputation on turning around underachieving businesses. For NPR News, I'm Jason Lopez in San Francisco.

MONTAGNE: This is MORNING EDITION from NPR News. I'm Renee Montagne.

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