HP earnings show steady gains

The company has reported small rises in third-quarter earnings and profit in the wake of acquisitions and cost-cutting measures introduced by recently-ousted chief executive Mark Hurd
Written by Ben Woods, Contributor on

HP, which is looking for a new chief executive following the swift departure of Mark Hurd, has posted a 6 percent profit in the third quarter.

The computer hardware and software giant on Thursday reported quarterly income of $1.8bn (£1.16bn), or 75 cents per share, on revenue of $30.7bn, up 11 percent year-on-year. Non-GAAP earnings are listed as $2.6bn, or $1.08 per share, up 17 percent.

The company's overall gains come, in part, from a strong showing from its services and enterprise storage and server divisions, which posted a profit of $1.4bn and $549m, respectively. Revenue increases from HP software and personal systems group divisions also contributed to the rise.

"The broad-based strength of HP's Q3 performance further demonstrates the power of our strategy and the discipline of our execution," said Cathie Lesjak, HP's chief financial officer and interim chief executive officer, in a statement.

Lesjak is heading the company in the wake of Mark Hurd's unexpected and hurried departure on 6 August. His resignation followed a company investigation into sexual harassment allegations, which were ultimately deemed not to breach HP's sexual harassment policy. However, HP said in a letter sent to employees that the former chief executive's relationship with a contractor indicated a "conflict of interest" and said that he had violated the company's business conduct standards by failing to maintain accurate expense reports and misusing company assets.

Hurd masterminded a number of cost-cutting measures that included the loss of 934 UK-based HP employees, as well as securing the acquisition of digital electronics manufacturer 3Com.

In its earnings report on Thursday, the company said the purchase of 3Com was a factor in the performance of HP's networking division during the quarter, which posted a revenue increase of 198 percent year-on-year. The division's sales were further bolstered by gains of 42 percent for its ProCurve line of switches and other hardware, which were integrated into the 3Com brand.

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