HP had a decent first quarter with a record $21.5 billion in revenue, up 10% Y-Y. The PC division revenues were up 11%, with profits improving a margin point to 2.1%. Imaging division wa sup a modest 3%, and servers & storage was up 9%. The services division was up an impressive 20%.
Revenues were up 6% in Americas, 12% in EMEA (helped by a weak dollar), and up 15% in Asia. Personal systems had its best quarter since before the merger, helped by strong corporate demand. HP has stiffened its pricing backbone and is seeing improved margins as a result. Imaging is seeing strong demand for color laser printers and multi-function printer/fax/copier/scanner products such as the 7140xi. The server & storage division saw the strongest x86 business in three years, with revenues up 19% on a 23% increase in units. This was offset by modest 3% growth in HP 9000 revenues and declining revenues for Tandem Nonstop servers. Itanium-based Integrity server revenues doubled in the year. A $33M workforce reduction charge will hit the server & storage division. The Services division is also reducing headcount, even though consulting revenues were up 20% and managed services were up 44% in the year.
Q2 is forecast between a decline to $21.2 billion and a slight uptick to $21.6 billion on a sequantial basis.
Peter S. Kastner
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