Hewlett-Packard Co (HP) beat Wall Street's expectations on Wednesday, when the computer maker reported that fiscal third-quarter profit surged on strong printer and laptop sales. The company's shares gained more than 5 percent in after-hours trading.
For the three months ended July 31, HP earned US$1.38 billion, or US$0.48 a share, compared with US$73 million, or US$0.03 per share, in the same quarter last year.
The year-ago numbers were dramatically lower because of a tax charge that resulted when the Palo Alto, California-based company pulled US$14.5 billion from foreign earnings and "repatriated," or reinvested, those profits in the US.
Sales in the fiscal third quarter rose 5 percent to US$21.89 billion from US$20.76 billion last year. If not for currency fluctuations, sales would have increased 6 percent.
Excluding one-time items, the company earned US$1.48 billion, or US$0.52 per share, up nearly 40 percent from the same quarter last year.
On that basis, which does not comply with generally accepted accounting principles, HP beat Wall Street expectations by US$0.05 per share. Analysts were expecting the company to earn US$1.37 billion, or US$0.47 a share, on sales of US$21.8 billion, according to a Thomson Financial survey.
"HP delivered another solid quarter with strong revenue growth, improved margins and healthy cash flow," said Mark Hurd, HP's chief executive. "We gained share without sacrificing margins and continue to execute well against our long-term plan."
Revenue from HP's printer division grew 5 percent to US$6.2 billion. HP revenue from laptops increased 14 percent, as the overall "personal systems" division sold US$6.9 billion in desktops, laptops and other computers, 8 percent more than the same quarter last year.
Software sales were particularly strong, with 30 percent year-over-year growth. The company, which sold US$318 million in software last quarter, will likely complete the acquisition of management software company Mercury Interactive Corp in the current quarter.
HP, which employs about 150,000 people, has been slashing jobs in offices worldwide since launching an aggressive cost-cutting campaign in July last year. The company shed 1,900 jobs last quarter. Hurd said "several thousand jobs" would be cut in the current quarter.
Hurd also emphasized in a conference call on Wednesday afternoon that HP does not use Sony battery packs in its laptop computers. HP rival Dell Inc is recalling 4.1 million lithium-ion batteries made by Sony because the battery packs could overheat or even explode.