H-P Rediscovers PC Mojo

The company's enterprise server and storage division showed one of the biggest margin improvements, with operating profit representing 9.1% of the division's $4.5 billion in revenue, up from 2.5% in the year-ago period. Hurd cited increasing revenue, pricing discipline and a refreshed product line. And the software division, which increased revenue 11% year-over-year, posted its first profit ever.

Unit shipments of consumer printers were up 6% year over year, while revenue for the segment declined 4%, suggesting that H-P may be lowering prices as it faces increasing competition from Dell and Lexmark(LXK Quote). While operating margins in the imaging division slipped to 13.2% from 16.6% a year earlier, Hurd said the company was sticking with its 13% to 15% margin target for the printer division going forward.

H-P is trying to do two things at the same time, said Hurd: "to be very efficient in our cost structure [while] at the same time try to grow in key markets."