Hewlett-Packard Co on Monday reported a 5 percent jump in net income driven by corporate spending that was offset by weak consumer demand, reflecting the industry’s lopsided recovery.
The world’s biggest technology company also raised its profit forecast for the new fiscal year. The numbers were posted after the market closed and HP’s shares rose in after-hours trading.
Purchases by big companies are buoying growth. They have thawed budgets that were frozen during the depth of the recession.
Meanwhile, unemployment worries have sapped consumers’ appetite for computers and state governments in the US have slashed spending to plug budget holes.
Other technology major leaguers, such as Cisco Systems Inc and Intel Corp, have issued warnings.
HP said its net income was US$2.54 billion, or US$1.10 per share, in its fiscal fourth quarter, which ended on Oct. 31. That was up 5 percent from US$2.41 billion, or US$0.99 per share, last year.
Excluding items, the company earned US$1.33 per share, topping the US$1.27 per share that analysts polled by Thomson Reuters were expecting, excluding items.
Revenue was US$33.28 billion, an 8 percent increase over last year.
Analysts expected US$32.75 billion.
The higher guidance calls for profit of US$5.16 to US$5.26 per share for the fiscal year ending in October next year. The previous forecast was US$5.05 to US$5.15 per share.
The higher figures include a gain of US$0.04 per share from real estate sales.
HP’s earnings conference call marked the first chance for investors and analysts to hear from the company’s new CEO, Leo Apotheker, since he started the job three weeks ago.
He takes over the company as it’s in mid-stride in a radical makeover. Mark Hurd, HP’s former CEO, was spending billions of dollars in acquisitions to make the company less of a one-trick pony that was dependent on printer ink for most of its profits, before he was ousted in the wake of a sexual harassment investigation.
Apotheker identified software and research as some of the areas he will focus on as CEO.
Building or buying better software would close a gap that exists between HP and IBM Corp. Pouring more funds into research will help HP tamp down a frequent criticism of the Mark Hurd years, in which research was among the areas clipped in broad cost-cutting.
Apotheker also is trying to win over HP’s workers.
He is restoring the vast -majority of employees’ salaries to their levels before an across-the-board cut that Hurd implemented in February last year. HP is also proposing a program that would allow employees to buy HP shares at a five percent discount.
Shares rose US$1.30, or 3 percent, to US$44.55 in extended trading, after the results were reported. The stock had risen US$0.76, or 1.8 percent, to US$43.25 at the end of regular-session trading.
The stock is still trading below its levels at the time of Hurd’s departure. It is down 7 percent, a decline that has wiped out US$10 billion in shareholder wealth.
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