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Revenue up but HP falls short

HP reports a 15 percent increase in first-quarter revenues but falls short of expectations because of Asian economic woes.

Hewlett-Packard (HWP) today reported a 15 percent increase in first-quarter revenues, driven in part by its desktop and mobile client business, but its earnings fell short of expectations as Asia's economic woes took a toll.

The computer maker reported net profits of $929 million, or 86 cents a HP at a glance share, up slightly from $912 million, or 87 cents a share, a year ago. Analysts, however, had expected the company to post earnings of 88 cents a share, according to First Call.

HP also is consolidating and restructuring its inkjet operations in North America. The restructuring is expected to cut earnings by 7 cents a share over the course of the year, but the company expects to save more than $100 million a year from these actions going forward.

Revenues rose to $11.8 billion for the quarter, up from $10.3 billion a year ago.

"We turned in a solid performance this quarter in many respects," said Lewis Platt, chief executive, in a prepared statement. "Going forward, our challenge is to maintain strong growth while rigorously controlling costs. Across HP, managers are making tough choices about programs and priorities. We also face a difficult environment in Asia. We are monitoring developments closely."

HP's computer business saw its revenues rise to $9.9 billion, up 15 percent from last year. Orders rose 13 percent over the same time last year to $10.2 billion. The company's desktop- and mobile-client business achieved strong revenue and unit growth, thanks to its Vectra line of corporate PCs.

HP's server businesses posted mixed results, with the Unix system servers posting strong revenue growth but the HP NetServer line showing but a slight revenue increase.

Meanwhile, the company's services and software business turned in moderate revenue growth, in such areas as its customer financing business and its OpenView suite of information technology management software.