Monday, May 17, 1999 Published at 22:08 GMT 23:08 UK
Business: The Company File
Hewlett-Packard sales soar
Good news for Hewlett Packard staff in Palo Alto
Strong personal computer and printer sales helped Hewlett-Packard (HP) to easily outstrip forecasts and post a 34% profits rise.
The company, mirroring the return to form of its rival IBM, said net income in the three months to 30 April rose to $918m from $685m, a year ago.
Sales were particularly buoyant in Europe for a company which has recently committed $100m to an advertising campaign to promote its notion of "e-services".
It is the latest stage in a fightback from disappointing sales of a year ago and criticism for being slow to wake up to the possibilities of the Internet.
The scale of its success in overcoming negative sentiment is demonstrated by the 25% leap in its share price since the start of 1999.
Commercial and consumer PC lines helped boost growth overall with its laptops and range of home PCs particularly strong, the company said.
Results were strong in Europe, where revenue rose 8% from a year ago to $4.5bn.
HP's printer business, which accounts for about a third of the company's revenues, did well, the company said.
Both the laser printer and inkjet lines posted "solid" revenue growth. HP also said market share in its inkjet business "increased noticeably around the world".
"We've turned in a very good profit, improved an already excellent product portfolio and managed our business well. In short, we did what we said we would do," said chief executive Lewis Platt.
"The numbers were very strong," said Stephen Dube, an analyst at Wasserstein Perella Securities in New York. "They're doing well in PCs."
HP stock surged $4.56 in composite trading to $88.75, a 52-week high.
Orders, closely watched by analysts, rose an improved 10%, although Mr Platt said in a statement that the Palo Alto, California, based company's challenge now was "to convert order growth into stronger growth in revenue".
Revenue rose 3.3% to $12.4bn from $12bn a year ago, a figure in line with some of the more aggressive forecasts from analysts.
"This is the third consecutive quarter that we've exceeded Wall Street expectations," said Mr Platt.
Revenue in the United States was $5.4bn, an increase of 2% compared with a year ago, while revenue from outside the United States rose 4% to $7bn.
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