Hewlett-Packard sees tech rebound

Hewlett-Packard on Thursday said it expected technology spending to rebound in the coming year and propel the top PC maker to at least a 17 per cent gain in earnings per share.

Revenue should increase more than 3 per cent to about $117bn, cost savings from the $13.9bn purchase of Electronic Data Systems will continue, and the company remains on the lookout for more acquisitions, chief executive Mark Hurd said at an annual gathering for Wall Street analysts.

In its core PC, services and printing business, HP can grow more than the overall market, said Mr Hurd. “This is the best position we’ve been in” during the nearly five years since he joined the company, he said.

The comments by Mr Hurd and other HP executives reinforce the spreading sentiment among industry leaders that tech spending is on the way back. HP said its projections were conservative, and that sales and profit could easily exceed the new forecast.

They said that HP’s cost structure was still being improved, that its scale was a major help, and that several trends were working to the company’s advantage.

The company’s already increased PC market share helps it weather component shortages and cut better supply deals. With a projected 3 to 5 per cent sales increase next year, HP’s PC division should have bigger revenue gains than the other two major units, services and printing, executives said.

In the printing business, which has seen revenue fall 20 per cent in the current year, managed printing services at large customers and a continuing shift toward digital graphics will help reverse the slide. In addition, more HP printing supplies will be sold for each printer.

And in computing sales to big companies, HP is trying to make inroads against Cisco Systems in networking. HP said it was being helped by a shift toward virtualisation and cloud computing and what it said was the convergence of storage, servers and connectivity gear.