HP sales climb 8% in fourth quarter

Hewlett-Packard reported a better-than-expected 8 per cent climb in fourth-quarter sales, led by a 25 per cent jump in server and storage revenue.

The world’s biggest technology company by revenue raised its profit forecast for the year just begun and executives said they were committed to increasing services and software sales, with each rising by 1 per cent or less in the quarter.

In his first earnings call since taking the helm of HP a few weeks ago, chief executive Léo Apotheker said he had met thousands of employees.

He said he had also been ignoring jibes from Larry Ellison, Oracle’s chief executive.

Mr Ellison has been lashing out at HP’s board for appointing the former head of Oracle’s rival SAP at a time when the two are battling in a US federal court.

The lawsuit, over SAP’s liability for improper access to Oracle code, went to a jury on Monday.

“A competitor has tried to distract us and you,” Mr Apotheker said in a call with reporters. “We have an impressive ability to execute and a strong momentum going into next year.”

HP earned $2.54bn in the quarter just ended, or $1.10 a share, up from $2.41bn and 99 cents, on $33.3bn in sales.

On a non-GAAP basis adjusted mainly for amortisation of intangibles and restructuring charges, earnings per share rose 17 per cent to $1.33, beating consensus estimates.

HP raised its forecast for the new fiscal year, to sales of between $132bn and $133.5bn and non-GAAP earnings per share of between $5.16 and $5.26, up 13 to 15 per cent from the year ended October 31.

In after-hours trading, HP shares rose more than 3 per cent to $44.60.

Mr Apotheker and other executives made clear that they were doing away with some of the austerity imposed by his predecessor, Mark Hurd.

They said they would resume paying rises and bonuses and would raise spending on salespeople and research and development.

Executives said they were happy with the quality and quantity of service deals lined up for the next few quarters and planned to make software a bigger part of the company’s revenue, both on its own and by integrating it with hardware offerings.

Sales of servers and storage rose to $5.3bn in the quarter, throwing off $730m in operating profit compared with $481m a year earlier.

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