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Hewlett-Packard on Tuesday raised its full-year guidance after it announced a beneficial tax settlement with the US Internal Revenue Service and restated its earnings for the second quarter.

The settlement, which was related to tax returns filed by the world’s second-biggest computer maker between 1996 and 1998, added $443m, or 15 cents a share, to a net profit of $1.5bn reported last month.

HP said it now expected full-year earnings of between $2.02 and $2.06 a share, up from a previous range of $1.87 to $1.91 a share.

The announcement came as HP added to its stable of digital photography services with the acquisition of Silverwire Holding, a Swiss maker of retail digital photo processing software.

The deal, for an undisclosed sum, marks the latest in a series of acquisitions by HP’s imaging and printing group, HP’s most profitable business.

Vyomesh Joshi, head of HP’s imaging and printing business, said the acquisition would allow HP to “compete more vigorously in the retail photo printing market”.

The Silverwire acquisition comes months after HP launched a direct challenge to photography rivals Kodak and Fujifilm with the introduction of a line of in-store digital photo kiosks – part of a broader move by HP to increase its share of the thousands of billions of pages, posters and photographs printed around the world each year.

HP last year bought Snapfish, an online photo storage and sharing site that allows users to order prints of their digital photos online.

The company said that Silverwire would improve the efficiency of its retail photo kiosks by improving their remote management and networking capabilities.

HP’s retail photo customers include Wal-Mart, the world’s biggest retailer, and Albertsons, the grocery store chain.

HP’s shares succumbed to a broader sell-off on Wall Street on Tuesday, falling 1.9 per cent to $30.99 by midday.

Shares in the company have risen more than 50 per cent over the past 14 months after several quarters of better-than-expected results.

The improved performance has led HP to regain lost ground against Dell, its chief rival in the PC market, and IBM, the world’s biggest IT group by revenues.

Mr Hurd told the FT last month that HP continued to examine potential acquisitions that made a good fit with existing business priorities.

These include expanding the computer maker’s retail photo offerings and strengthening its position in the booming market for software that helps power big corporate computer systems.

Copyright The Financial Times Limited 2017. All rights reserved.
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