Notebooks and servers continue to lift HP earnings

Hewlett-Packard closes out the year with strong growth, helped by increased sales in China and other emerging nations.

Emerging nations are buying notebooks by the bundle, and Hewlett-Packard is reaping the benefits.

HP reported its fourth-quarter earnings Monday, and revenues were up across its business units, but the PC business was again the star. Revenue for the Personal Systems Group, which sells desktops and notebook PCs, was up 30 percent from the same quarter a year ago to $10.1 billion. It's the first time the business unit has crossed the $10 billion threshold. Shipments of PCs rose about one-third in the last year.

But HP is claiming success for its revenue and sales growth all for itself. Demand for Microsoft Windows Vista had nothing to do with the high growth numbers in PCs this year, said HP CEO Mark Hurd. There was "never a Vista moment at any time over the past year," he said on a media conference call. "There was no Vista hold back, so there was no Vista positive inflection point."

Overall, HP reported $28.3 billion in revenue, an increase of 15 percent from the same quarter a year ago, and earnings of 81 cents per share. The company also reported that the board of directors had approved $8 billion to be used for future share repurchases.

The world's No. 1 PC maker has turned in a string of highly successful quarters since surpassing rival Dell in market share more than a year ago. HP has taken advantage of the explosion of first-time PC buyers in emerging nations like Brazil, Russia, India, and China. Those regions now account for 9 percent of the company's revenue. On the earnings conference call, Hurd noted that HP now sells its products in 400 Chinese cities, with more planned in the future.

Blade servers also saw high growth, with an increase of 78 percent in revenue in the last year. The Imaging and Printing Group, the business unit that sells cameras and printing hardware, saw the weakest growth, turning in flat profits and 4 percent growth to $7.6 billion in the last year. Notably, consumer hardware sales declined 5 percent. Last week, HP announced it is changing its camera business model and wants to partner with someone else to manufacture its cameras .

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About the author

Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur.

 

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