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14/02/2002
HP profit triples on back of consumer demand
Fuelled by strong consumer sector sales, computer giant Hewlett-Packard has seen profits for the first quarter triple to $484 million due to strong domestic printer and computer sales.
HP Chairman and CEO Carly Fiorina said: "We are facing the dual challenges of a weak global economy and rapid industry transformation, driven by advances in technology, changing customer requirements and increased competition. Our first quarter results demonstrate HP's continued ability to stay focused on customers and effectively execute our business plan regardless of market conditions.
"Within this tough environment, we generated a meaningful increase in overall revenue versus last quarter based on strong sales in consumer and commercial PCs and digital imaging products, as well as exceptional growth in outsourcing. By maintaining an intense focus on expense management and continuing to tune our cost structure, we saw solid gross margin improvement. Profitability improved significantly in our imaging and printing, embedded and personal systems and IT services businesses, driving EPS above expectations.
The figures revealed that aggressive asset management coupled with inventory reductions of $746 million improved HP's net cash flow from operations jump to $1.6 billion for the quarter. The company moves into Q2 with a balance sheet showing more than $7 billion in cash and short-term investments.
But Fiorina said the company needed to do more and warned that HP must take decisive actions to improve profitability, particularly in business computing systems and PCs.
She underscored the importance of the merger with Compaq, which she said was the "single best way to simultaneously achieve market leadership, serve our customers, improve our profitability, create exciting opportunities for employees and deliver value for our shareowners".
While analysts view the $22 billion Compaq acquisition, a company with strong server, storage, PC, and IT service sectors for business, as complementing HP's long-term businesses weaknesses, dissident HP director Walter Hewlett is strongly opposed to the merger with loss-making Compaq, which he views as "unnecessary".
(SP)
HP Chairman and CEO Carly Fiorina said: "We are facing the dual challenges of a weak global economy and rapid industry transformation, driven by advances in technology, changing customer requirements and increased competition. Our first quarter results demonstrate HP's continued ability to stay focused on customers and effectively execute our business plan regardless of market conditions.
"Within this tough environment, we generated a meaningful increase in overall revenue versus last quarter based on strong sales in consumer and commercial PCs and digital imaging products, as well as exceptional growth in outsourcing. By maintaining an intense focus on expense management and continuing to tune our cost structure, we saw solid gross margin improvement. Profitability improved significantly in our imaging and printing, embedded and personal systems and IT services businesses, driving EPS above expectations.
The figures revealed that aggressive asset management coupled with inventory reductions of $746 million improved HP's net cash flow from operations jump to $1.6 billion for the quarter. The company moves into Q2 with a balance sheet showing more than $7 billion in cash and short-term investments.
But Fiorina said the company needed to do more and warned that HP must take decisive actions to improve profitability, particularly in business computing systems and PCs.
She underscored the importance of the merger with Compaq, which she said was the "single best way to simultaneously achieve market leadership, serve our customers, improve our profitability, create exciting opportunities for employees and deliver value for our shareowners".
While analysts view the $22 billion Compaq acquisition, a company with strong server, storage, PC, and IT service sectors for business, as complementing HP's long-term businesses weaknesses, dissident HP director Walter Hewlett is strongly opposed to the merger with loss-making Compaq, which he views as "unnecessary".
(SP)
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