HP Profit Growth Driven by EDS, Laptop Sales - HP to Increase Printing Supplies Prices
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TO INCREASE PRINTING SUPPLIES PRICES
HP said software revenue rose 13 percent to $855 million, while
revenue from its enterprise storage and server division fell 1 percent
to $5.1 billion. Revenue from its imaging and printing group fell 1
percent to $7.5 billion.
Hurd said HP planned to again increase prices on printing supplies
in the first quarter due to exchange rate pressure from the Japanese
yen.
"It's a cost pass-through more than anything. In this environment
it's probably one of the few areas you can actually raise prices but
you have to be careful," said Shannon Cross, of Cross Research.
HP posted a 21 percent increase in sales of notebook PCs, but desktop PC revenue fell 2 percent.
Asked how he would reconcile HP's view to Intel Corp's (INTC.O: Quote, Profile, Research, Stock Buzz) more negative outlook on PCs, Hurd said: "We saw some things that, to be blunt, were just different in our numbers."
He said he did not know the details of Intel, which had shocked markets earlier this month with a revenue warning.
Ashok Kumar, an analyst with Collins Stewart, thought HP's guidance was too optimistic about sales of equipment.
"If life cycles get extended from three years to four years that
will have a dramatic effect on revenue performance and HP cannot
sidestep it," he said.
HP shares, which gained 3 percent on the New York Stock Exchange
earlier on Monday, ticked 1 percent lower to $35.30 in after-hours
trading. The stock had lost about one-third of its value from September
to mid-November, before gaining about 20 percent since the strong
preliminary results.
The company stood by its forecast for first-quarter earnings of 93
to 95 cents per share excluding items, on revenue of $32 billion to
$32.5 billion. It also confirmed its forecast for fiscal 2009 earnings
of $3.88 to $4.03 per share excluding items, on revenue of $127.5
billion to $130 billion.
(Writing by Tiffany Wu; editing by Richard Chang)
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