Scandal Scraps Weigh on H-P

H-P has "substantially" completed a restructuring plan that called for laying off about 15,000 workers, or 10% of the company's workforce, executives said. The company has about 1,000 pink slips left to distribute in the current quarter.

Hurd said H-P was not done improving its cost structure, despite the success he said H-P has had in hitting short-term milestones.

"We certainly aren't taking any victory lap here," Hurd told analysts in a post earnings conference call.

The company said sales in the three months ended Oct. 31 totaled $24.6 billion, compared with $22.9 billion at this time last year.

Analysts polled by Thomson Financial were expecting $24.1 billion in sales.

H-P earned $1.69 billion in net income, or 60 cents a share, vs. $416 million, or 14 cents a share a year earlier, when the company had $1.1 billion in restructuring costs.

Excluding $208 million in restructuring charges in its 2006 fourth quarter, H-P said it earned 68 cents a share.

Analysts were looking for 64 cents a share.

Storage was a weak spot for the company, with Hurd saying he was disappointed with the business' 1% revenue growth.

But the company saw healthy growth in printers, PCs and servers.

Sales in H-P's enterprise storage and server business were up 4%, at $4.7 billion. Industry standard server revenue grew 9% while sales of blade servers increased 38%.