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HP revenue up on improved notebook sales and EDS acquisition

by Scott Bicheno on 25 November 2008, 13:30

Tags: Hewlett Packard (NYSE:HPQ)

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EPS from EDS

HP has exceeded expectations by increasing revenue and profit for the quarter ending 31st October compared to the same period last year. Revenue was up 19 percent to $33.6 billion, while profit was up four percent to $2.7 billion.

However, this good performance does need to be viewed in the context of the EDS acquisition. If you take off EDS revenue then revenue only grew by five percent year on year, still acceptable considering the state of the global economy.

"HP capped off a strong year by delivering another solid quarter led by strength in our services segment and disciplined expense management," said Mark Hurd, HP chairman and chief executive officer. "Our global reach, broad portfolio, numerous cost initiatives and consistent execution differentiate HP in the current economic environment."

Currency fluctuations had a significant part to play in the figures. EMEA delivered the biggest revenue growth of 22 percent, but when adjusted for the relative strengthening of the dollar this drops to 15 percent and overall revenue growth drops from five to two percent.

A third of HP's revenue was provided by its personal systems group, which saw revenue grow ten percent on an increase in units shipped of 19 percent - implying margins are tightening. Notebooks provided all the revenue growth with 21 percent, while desktop revenue declined by two percent.