HP firing on all cylinders

Hewlett-Packard on Thursday reported fiscal third quarter earnings of $2.1 billion, or 66 a share, and revenue of $25.4 billion. Overall, HP delivered a solid performance across all of its business units.

Excluding one-time items, HP reported earnings of 71 cents a share. According to Thomson Financial, analysts were expecting earnings of 66 cents a share on revenue of $24.1 billion. Operating margins were 8.3 percent in the third quarter, up from 6.9 percent in the same quarter a year ago.

In a statement, HP projected fourth quarter revenue of $27 billion to $27.2 billion, compared to estimates of $26.4 billion. HP said earnings will be in the range of 75 cents to 76 cents a share in the fourth quarter. Excluding items, earnings are expected to be 80 cents a share to 81 cents a share. Analysts were expecting 78 cents a share.

For the year, HP is projecting revenue of $103 billion to $103.2 billion with earnings of $2.61 to $2.62 a share. Excluding items HP sees earnings of $2.86 a share to $2.87 a share. Those projections were also ahead of estimates.

HP's performance wasn't too much of a surprise. Analysts expect both HP and Dell to report good quarters based on lower component costs.

Here are HP's fiscal third quarter financials by business unit:

• The personal systems group had revenue of $8.9 billion, up 29 percent from a year ago. Unit shipments were up 33 percent from a year ago. Notebooks grew 54 percent with desktops increasing 12 percent in the quarter. Commercial sales were up 19 percent in the quarter compared to a year ago. Consumer PC sales were up 46 percent from a year ago. Operating profit was $519 million.
• HP's imaging and printing unit saw sales jump 8 percent to $6.8 billion. HP seems to be doing well with commercial printers as revenue was up 17 percent. Consumer printing sales were up 8 percent. Operating profit was $981 million.
• Enterprise storage and servers posted solid revenue growth up 10 percent from a year ago to $6.8 billion. Blade revenue was up 81 percent and standard server sales gained 16 percent.
• Services revenue was up 8 percent to $4.2 billion. Operating profit was $430 million.
• Software was largely fueled by Mercury Interactive. HP's software revenue was up 74 percent from a year ago to $554 million.

HP ended the quarter with $12.5 billion in cash.