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HP revenue up 8 percent at $33 billion

Leo Apotheker's first full quarter as CEO sees modest gains for the world's largest technology company by volume, slightly beating expectations.

Hewlett-Packard's fourth-quarter earnings came in ever-so-slightly ahead of expectations.

HP today announced revenues of $33.3 billion, an increase of 8 percent over the past year. Analysts were expecting revenue between $32.23 billion and $33.29 billion. The company reported earnings of $2.5 billion, an increase of 5 percent from a year ago. Earnings per share were $1.10 after acquisition and other onetime charges.

"HP proved once again that it is able to execute, given its market strengths and technology leadership," new CEO Léo Apotheker said in a statement. "I have seen firsthand that we have talented people who are focused on delivering value for our customers. Our market opportunity is vast, and I am confident that we will extend our leadership into the future." This is Apotheker's first earnings call since being given the top job at HP.

As with previous quarters, the most growth in HP's business came from the Enterprise Storage and Servers (ESS) business. That business unit saw its revenue grow 25 percent to $5.3 billion.

The Personal Systems Group unit, which sells notebooks, desktops, and mobile devices, saw smaller growth, at 4 percent, but brought twice the revenue as the enterprise group, at $10.3 billion. HP said notebook revenue was down 3 percent from the same time a year ago, though desktop revenue was up 13 percent.

Chief Financial Officer Cathie Lesjak said the corporate refresh cycle continued during the quarter. "We continue to see momentum in the commercial sector," she said during a call with analysts.

There were no direct comments from Apotheker regarding the current sideshow--the SAP-Oracle trial, into which Oracle CEO Larry Ellison has tried to draw HP's new CEO. Apotheker is the former head of SAP, and Oracle has repeatedly tried to call him as a witness in the trial but so far has been unable to because it had been reported that he was outside of California.

"A competitor has been trying to distract us and you from the good work of HP's business," Apotheker said, appearing to address the matter during a call with reporters. "But we have remained focused, and I think our results" show that.

"What really matters to investors is HP's business performance," he added.

Apotheker said, for the record, that he was at company headquarters in Palo Alto, Calif. for the earnings call. During a call with analysts, he also took some time to discuss some internal housekeeping matters. Some of his first orders of business since taking the reins at HP, it seems, have been to reverse some of the more controversial moves made by his predecessor, Mark Hurd.

Besides spending more on research and development during the quarter--Apotheker said spending in that area increased more than 8 percent--he said HP would unfreeze salaries. During fiscal year 2011, salary increases would be back as a normal feature of the employee review process, he said.

Hurd infamously cut employee salaries in February 2009 amid financial turmoil, a move that made him very unpopular with the rank and file.

Apotheker is still not ready to talk much about specifics of the business units, however, perhaps reflecting the newness of his job. When asked about the Palm acquisition and plans for investing in WebOS, Apotheker said he wasn't quite ready to discuss that but that he would be in the future.

Shares of HP were up 3.05 percent to $44.57 in after-hours trading.

Updated at 3 p.m. PT with details from the call with analysts.