HP posted better-than-expected financial results Wednesday that were buoyed by strong growth in the company's PC group.
Excluding certain charges, HP reported a profit of $895 ,million or $0.52 per share on revenue of $21.9 billion for its fiscal third quarter, ended July 31. Analysts had been expecting earnings per share of $0.47 on revenue of $21.8 billion according to Thomson Financial.
The company's Personal Systems Group saw revenue grow eight per cent, year over year, with notebook sales jumping 14 per cent and desktop PC sales up five per cent. Operating profit for the group was up too, totalling $275 million for the quarter. Last year the group's profit was $163 million for the same period.
HP's results -- considered a bellwether for the industry -- come during a slowdown in PC sales growth and earnings warnings from companies such as Intel, AMD and Dell.
Dell, which is due to announce results on Thursday, has warned of lower profits for its most recent quarter because of "aggressive pricing and slow commercial sales worldwide."
Worldwide, PC sales grew by 9.7 per cent year-over-year during the second quarter of 2006, a slowdown from 12.9 per cent growth in the first three months of the year.
HP's other main lines of business did not fare as well as the Personal Systems Group. Revenue in the company's enterprise servers and storage business was up only 3 percent, thanks in part to declines in HP's PA-RISC and Alpha systems businesses.
The company's printer business grew by five percent but was hurt by a three per cent slowdown in consumer hardware sales, HP said. Overall, the group remained highly profitable, however, earning $884 million on $6.2 billion in revenue
HP's Services revenue was up one per cent year-over-year, totalling $3.9 billion, and software revenue was up 30 percent, totaling $318 million for the quarter.