HP Rolls To Big Profits

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HP Rolls To Big Profits

By: David Utter
2006-05-17

Hewlett-Packard's strategy under CEO Mark Hurd has earned the company a nice jump in net income and an increase in market share at the expense of rival Dell.

HP Rolls To Big Profits

Dumping Carly Fiorina looks like a smart move by the HP (HPQ) board. Hurd's cost cutting and focus on profits helped the company bring in $1.7 billion in GAAP adjusted net earnings for its second financial quarter of 2006.

Those earnings of 51 cents per share met the high end of analyst expectations for HP. Analyst consensus sees a softer quarter ahead for HP, and the computer industry in general; average earnings per share estimates for HP range from 38 to 46 cents.

"HP delivered another solid quarter," said Hurd. "We grew revenue, expanded margins and generated record cash flow." For the quarter, that cash flow amounted to $3.6 billion on net revenue of $22.55 billion.

Investors expressed their pleasure with HP's numbers in after hours trading. Shares of HP moved up by 1.19 to 32.30 as the stock rebounded from a drop of 52 cents over the course of the normal trading day on Wall Street.

HP made it to this point by restructuring its retirement options and announcing plans to eliminate some 15,000 jobs globally. Much of their gains have come at the expense of Dell Computer, as the personal systems business for HP continued its resurgence.

The PC business for HP saw 10 percent growth year over year, bringing in $6.977 billion in revenue and operating profit of $248 million during the quarter. The printer business, which had lagged under Fiorina, grew 5 percent year over year, with $6.724 billion in revenue and a healthy operating profit of over $1 billion.

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Tag: Hewlett-Packard

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About the Author:
David Utter is a staff writer for InternetFinancialNews and WebProNews covering technology and business.


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