H-P Beats the Street (Update)
SAN FRANCISCO - Hewlett-Packard (HPQ) outpaced Wall Street's third-quarter earnings estimates Tuesday.
Shares of H-P were recently up 2.8% to $44.93 in after-hours trading.
Net income grew 14% to $2 billion, or 80 cents a share, from $1.8 billion, or 66 cents a share, in the year-ago period.
Excluding special charges, EPS was 86 cents. Analysts were looking for 83 cents.Revenue at the Palo Alto, Calif., tech company rose 10% to $28 billion, or 4.7% in constant currency, from $25.4 billion for the same quarter of last year. Analysts polled by Thomson Reuters were expecting $27.4 billion. Operating margin, excluding special items, improved 80 basis points year over year to 9.8%. In the company's PC business, revenue rose 15% to $10.3 billion, driven by unit growth of 37% in notebooks for total unit growth of 20%. Printer group revenue grew 3.4% year over year to $7 billion, despite a drop in the number of printer units shipped. Executives cited increased adoption of H-P's digital and wireless printers and growing demand in certain categories of printing supplies. Uptake of H-P's Indigo digital graphics unit for commercial print companies yielded 31% year-over-year growth in page volume, which drives sales of ink. The company now has more flexibility to focus more exclusively on higher-margin products, Chairman and CEO Mark Hurd said on Tuesday's conference call. "Graphics is a strong story for us. We're interested in growing that because of the [impact] it can make in supplies growth," Hurd said.
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