Hewlett-Packard Co. edged past Wall Street's forecast for the latest quarter, showing some resilience in troubled times, as strong laptop sales helped offset falling printer orders and weakness in some server lines.
HP's CEO Mark Hurd, who has won over Wall Street by aggressively slashing HP's expenses, said the economy is getting "tougher and less predictable." He vowed that HP would emerge stronger because of the company's extensive and ongoing cost-cutting moves.
Profit slipped 2 percent, while revenue grew 19 percent, helped by a huge acquisition.
Electronic Data Systems Corp., which HP bought for $13.9 billion to challenge IBM Corp. for more technology-services contracts, added $3.9 billion in revenue.
Severe cost-cutting will help HP meet its financial targets as it digests that deal. HP is cutting 24,600 jobs, nearly 8 percent of its 320,000-employee work force, in a major restructuring designed to save more than $1 billion a year.
HP, which gets more than two-thirds of its sales from outside the United States, managed to stack up some big gains in the latest quarter despite the economic downturn.
The company sold $6.3 billion worth of laptops in the three months ended Oct. 31, a 21 percent increase from a year ago, at a time when customers are scaling back spending and suppliers are struggling. Intel Corp., the world's biggest maker of microprocessors, recently slashed $1 billion from its guidance for the October-December quarter because of falling demand for its chips.
HP did see significant weakness in other key areas, however. Revenue in two server categories declined and printer sales were off. Ink sales, a big reason the printer division contributes half of HP's entire operating profit, were a bright spot. Supplies revenue, including ink, rose 9 percent.
Hurd continues to wring more profit out of the business, in part, because of his focus on reducing expenses.
When the latest...
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