Hewlett-Packard sparking profits

HP boss Mark Hurd says the company is now more profitable

US computer giant Hewlett-Packard posted strong profits despite taking a one-off charge on its foreign earnings.

The company earned $1.06bn (£650m) in its third quarter, up from $586m for the same period one year ago.

But it took a one-off charge of $988m for the cost of repatriating $14.5bn in foreign profits to its home base.

Hewlett-Packard says earnings will be even stronger in the fourth quarter at 44 to 47 cents per share, which boosted its stock in after-hours trading.

Hewlett-Packard is the world's second biggest computer manufacturer, as well as making printers, copiers, and other computer peripherals.

It said that sales rose to $20.8bn compared to $18.6bn in the same quarter last year, and it projected further sales growth to $22.6bn in the next quarter.

"I'm encouraged by what we have achieved to date, and we are focused on driving further performance improvements", said chief executive Mark Hurd.

The company's fortunes contrast with that of other computer makers.

Its biggest rival, Dell, reported disappointing figures last week, and a shares in a smaller discount manufacturer, Gateway, fell sharply on lower profits on Monday.

Restructuring plan

The results are a vindication of the tough strategy announced by Mr Hurd, who replaced the high-profile chief executive Carly Fiorina in April.

Last month he said he would cut 14,500 jobs over the next 18 months in an attempt to save $1.9bn (£1.1bn) a year.

The layoffs are the biggest to hit HP's workforce since Ms Fiorina engineered a $19bn takeover of Compaq in 2002, a move she accompanied by widespread job cuts.

It was the continuing difficulty in integrating the Compaq computer business that stoked up the business row that ultimately led to Ms Fiorina's departure.

The initial merger was also opposed by one of the firm's founders and many older employees.