Hewlett Packard's figures disappointed Wall Street expectations last week despite announcing record profit.
Revenue was up 15 per cent to $11.8 billion for the quarter to 31 January, while net profit was $929 million, compared with $912 million for the same quarter last year. Earnings per share were 86 cents, compared with 87 cents a year ago, and slightly below Wall Street expectations of 88 cents.
The results were a 'solid start to the year', according to Lew Platt, HP chairman and CEO.
Growth in the desktop and mobile client business, driven by sales in the US sub-$1,000 PC market, was very strong, although the company's server business posted mixed results. Unix systems servers performed well, although the HP NetServer family achieved a disappointing increase in revenue.
Revenue in the US rose 21 per cent to $5.2 billion, while sales outside the US increased 10 per cent to $6.6 billion; European revenue rose eight per cent to $4.2 billion. Currency effects reduced HP's reported revenue growth by about seven percentage points.
While revenue in Asia, Canada and Latin America rose 14 per cent to $2.4 billion, HP said it continued to be concerned about economic conditions in Asia.
'We are monitoring developments closely and will continue to work to minimise the possible effects of economic instability,' said Platt.
Addressing HP's future, Platt said the challenge was in controlling costs, where managers are 'making tough choices about programmes and priorities'.
HP said it would consolidate its North American printer manufacturing operations to cut expenses.
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