HP Q4 revenue up, profits fall on layoff charges

HP’s 4th quarter revenue rose on strong growth in PC and server shipments, but restructuring charges and a decline in revenue from consumer printers hurt its profitability for the quarter.

HP. the world’s largest printer maker, said net income for its fourth fiscal quarter ended Oct. 31 fell to $416 million, or 14 cents per share, from $1.09 billion, or 37 cents per share, in the year-ago period. Revenue rose to $22.9 billion from $21.4 billion.

"The results look very, very positive pretty much across the board," said SG Cowen analyst Richard Chu.

"Throughout the last six to nine months, HP has really been flexing its muscles."

"HP delivered another strong quarterly performance, with balanced revenue growth, good cost discipline, improved margins in key businesses and strong cash flow," said Mr Hurd, who earlier this year replaced Carly Fiorina after she was ousted.

HP is in the process of rolling through nearly 15,000 job cuts it announced in July to help cut annual costs by almost $2 billion. The company’s per-share results, excluding items, in all four fiscal 2005 quarters have topped average Wall Street expectations as its businesses have improved.

"We’ve been doing a lot of things in the company at the same time and we’ve been doing that well," HP CEO Mark Hurd told reporters on a conference call to discuss the results.

Company shares soared more than 5%, or $1.55, on news of the results. Earlier, HP shares rose 73 cents, or 2.6%, to close at $29 on the New York Stock Exchange.

In August, HP said it expected fourth-quarter sales to be between $22.4 billion and $22.8 billion.