Hewlett-Packard Co’s (HP) net income jumped 28 percent in the latest quarter as stronger demand for computers is helping to heal a battered technology industry.
The company also raised its forecast for this year, sending shares higher.
The results mark a continued growth in profit at the world’s No. 1 maker of personal computers and printers.
Although HP had been making money even during the height of the recession, its net income had been getting smaller each quarter. But for three straight quarters now, net income has been growing.
The numbers show how deeply dependent HP is on PCs even as it expands aggressively into more profitable areas, such as technology services and computer networking.
HP said after the market closed on Tuesday that it earned US$2.2 billion, or US$0.91 per share, in its fiscal second quarter, which ended on April 30. It earned US$1.7 billion, or US$0.71 per share, in the same period last year.
Excluding special items, it earned US$1.09 per share. Analysts expected US$1.05 per share on that basis.
Revenue rose 13 percent to US$30.8 billion, better than the US$29.8 billion that analysts polled by Thomson Reuters expected. In the same quarter a year earlier, revenue was US$27.4 billion.
For 2010, HP is now predicting profit of US$4.45 to US$4.50 per share, excluding special items. That’s higher than its previous forecast of US$4.37 to US$4.44 per share.
The higher outlook excludes US$0.69 per share in one-time costs, largely related to HP’s restructuring and acquisitions.
When those costs are included, HP now expects its net income this year to be US$3.76 to US$3.81 per share, which is down from its earlier estimate.
The company has been on a buying binge recently as its dependence on PCs wanes.
California-based HP said last month that it’s buying smart-phone pioneer Palm Inc for US$1.4 billion in a bid to beef up HP’s very small mobile phone business. HP’s US$2.7 billion acquisition of 3Com Corp makes it a stronger player in computer networking.
Robust consumer demand has helped buoy PC makers and their suppliers, even as they grapple with anemic corporate appetites for new PCs. HP’s PC division posted a 21 percent revenue increase over last year.
Cathie Lesjak, HP’s chief financial officer, said in an interview that HP saw an “uptick” in orders from smaller businesses and the financial services industry. But as previously predicted, Lesjak said, spending by large corporations “refreshing” their PC fleets will remain weak until the second half of this year.
“We’re not calling for a really big uptick in corporate refresh at this point in time, but we’re definitely seeing some signs there,” she said.
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