Renewed hardware sales boost HP

Hewlett-Packard on Tuesday reported that second-quarter revenues topped $30bn as businesses resumed recession-delayed hardware purchases from the world’s biggest PC manufacturer.

Sales of $30.8bn to April 30 were up 13 per cent from $27.4bn a year earlier and beat Wall Street expectations of $29.8bn. The company’s shares rose 2.4 per cent to $47.90 in extended trading on the news.

“After many customers deferred hardware purchases in 2009, we are seeing strong growth in a number of our businesses,” Mark Hurd, chief executive, told an analyst conference call.

This was led by 54 per cent growth in its core Industry Standard Servers for businesses, which are installed in information technology departments and data centres.

Mr Hurd also highlighted HP’s strength in emerging markets. Sales in Brazil, Russia, India and China (known as the Bric nations) increased 25 per cent year-over-year to account for 10 per cent of total revenues. “The global demographics are rapidly changing with a fast-growing middle-class population migrating to large cities in emerging markets ... at the rate of about 60m people a year,” he said, adding that HP would leverage its scale and global reach as the largest IT company to capitalise on the chance to provide them with mobile devices and related infrastructure.

HP’s PC business grew by 21 per cent to $10bn, making it a third of HP’s business. Desktop revenues increased by 27 per cent and notebooks by 17 per cent, but notebooks still represented 56 per cent of PC revenues.

HP’s 13 per cent growth was aided by a currency benefit worth four percentage points. Adjusting for currency effects, sales were up 7 per cent in Europe, 9 per cent in the Americas and 10 per cent in Asia- Pacific. Two-thirds of the company’s sales come from outside the US.

HP reported earnings per share rose 27 per cent to $1.09, ahead of an analyst consensus of $1.05.

The Silicon Valley company said it expected sales of $29.7bn to $30bn in the current quarter, compared with Wall Street expectations of $29.8bn and it would match earnings expectations of about $1.06 per share.

It said it was not including any revenues from handset maker Palm, which it acquired last month.