Hewlett Packard today reported its fourth-quarter earnings that were in-line with a preliminary release last week, when the company announced plans to acquire 3Com. For the quarter, the company reported earnings of $1.14 per share on $30.8 billion in sales. Analysts had been expecting of $1.13 per share on $30.4 billion. (Statement)
For the full year 2009, the company reported earnings of $3.85 per share on sales of $114.6 billion.
Looking ahead, the company forecast earnings of $1.03 to $1.05 per share on sales of $29.6 billion to $29.9 billion for the first quarter - which would include the holiday season. For the full year 2010, the company raised its projection to $118 billion to $119 billion, up from $117 billion to $118 billion and also upped its earnings projection to $3.65 to $3.75 per share, up from $3.60 to $3.70. The projections do not reflect any impact from the 3Com acquisition, the company said.
Among the highlights of the quarter was the eight percent jump in revenue, to $8.9 billion, in Services, which has been a darling of the company as its integrated EDS.
On a call with analysts, Hurd said the integration of EDS, which he called an "enormous asset," has gone well and that the company is just starting to leverage it to position HP in not only services offerings but through hardware and software, as well. In a statement, HP Chairman and CEO Mark Hurd said:
HP’s solid performance in Services drove record profit, and the accelerated pace in signings creates strong momentum going into 2010. Our operational execution and improving cost structure generated strong quarterly and year-end results. We expect to outperform the market due to our significant scale, broad portfolio and market-leading position.
In contrast, the imaging and printing group saw a revenue decline of 15 percent, down to $6.5 billion. Supplies - aka ink - revenue was down 8 percent. Printer unit shipments were down 20 percent, with commercial units down 38 percent and consumer units down 14 percent.
Hurd said the group is positioning itself for recovery with strategic moves, including controlling costs and inventory levels, as well as corporate partnerships and web-connected printers. He said the company sees mergers and acquisitions as a way of quickly entering adjacent businesses that work well with HP's strategies. He touted the 3Com deal as one that will advance HP's offerings in security and networking, enabling it to "deliver the next generation of data centers."
Finally, Hurd said the company is positioned stronger than when it entered the economic downturn. The economy remains challenging, Hurd said, but that there are "encouraging signs of recovery" that are starting to emerge in certain markets.
Shares of HP were up about 2 percent in regular trading, closing at $51.02. In after hours trading, shares saw a slight decline.