Emerging markets drive HP growth

By Staff Writer for HP
Johannesburg, 22 May 2008

IT giant HP has reported growth of 11% in net revenue - 5% when adjusted for the effects of currency - in its 2008 Q2 results.

Mark Hurd, HP chairman and CEO, says: "With 70% of revenue now coming from outside the US, we benefited from robust demand in emerging economies."

The company`s net revenue for the second quarter is up $2.7 billion, to $28.3 billion, from the previous year.

Second quarter operating profit is up 22%, to $2.6 billion, with earnings per share up to $0.80, from $0.65 a year earlier.

The company reported record cash flow from operations of $4.8 billion.

Revenue in the Americas grew 4% on a year-over-year basis, to $11.1 billion. Revenue grew 16% in Europe, the Middle East and Africa, to $11.9 billion. Revenue grew 16% in Asia Pacific, to $5.2 billion.

The top growth sector for the company was HP Software revenue, which grew at a rate of 28%, compared with the period year-on-year, to $727 million. This was led by 36% growth in the Business Technology Optimisation portfolio.

HP Financial Service followed suit, with a 25% year-on-year revenue growth rate. Financing volume and net portfolio assets increased 15% and 14%, respectively, over the prior-year period. Operating margin was 6.9% of revenue, up from 6.5% in the comparable period last year.

Personal Systems Group revenue grew 16% year-over-year, to $10.1 billion, with unit shipments up 21% on a year-over-year basis.

The Imaging and Printing Group revenue grew 6% year-over-year, to $7.6 billion.

Enterprise Storage and Servers reported revenue of $4.8 billion, up 4% over the prior-year period, fuelled by ESS blades.

HP Services revenue increased 12% year-over-year, to $4.6 billion. Revenue in Technology Services grew 10%, with Outsourcing Services and Consulting and Integration up 14% and 15%, respectively, compared with the prior-year period.

HP estimates Q3 FY08 revenue will be $27.3 billion to $27.4 billion.