HP posts 29% increase in Q3 profit

Hewlett-Packard Co. on Thursday reported 29 per cent rise in third quarter profit, beating expectations, owing to the cost cuts and declining component prices. The terrific earnings report favored the conjecture that the company may crack $100 billion in sales this year for the first time.

Net income rose to $1.78 billion, or 66 cents per share, from $1.38 billion, or 48 cents per share, a year earlier. Excluding items, HP earned 71 cents per share. Revenue in the quarter rose to $25.4 billion from $21.9 billion a year earlier.

Analysts had anticipated 66 cents of earnings per share before certain items and revenue of $24.1 billion.

H.P. shares climbed 45 cents, to $46.50, in after-hours trading. Before the results were released, the stock had closed down 10 cents at $46.05. According to analysts, HP has become so well-positioned to profit that even an upside earnings surprise isn't enough to move the stock dramatically. The leadership of chief executive, Mark V. Hurd is highly credited.

Biggest revenue came in the Personal Systems Group, growing to $8.89 billion from $6.92 billion last year. The imaging and printing group profit rose 11 percent from $884 million to $981 million.

Hurd said the company also benefited from growth in emerging markets during a quarter that is typically slow. Price slumps in computer memory, disk drives and microprocessors this year have benefited all computer manufacturers.

Amidst the sorting of boardroom spying scandal last fall, HP reclaimed the title of the No. 1 seller of PCs worldwide from struggling rival Dell. In the second quarter HP held 19 per cent of the market share compared with Dell’s 16 per cent.

The world’s largest PC maker expects profit in the fourth quarter to be 80 cents to 81 cents per share, excluding one-time charges. Sales are expected to be in the range of $27 billion to $27.2 billion.

This estimate stands a little higher than the analysts’ prediction of profit before items of 78 cents per share and revenue of $26.5 billion.

So far this year, HP shares are up 11 percent, hitting a 52-week high last week of nearly $50.