Happy times at HP
Firm posts positive results after ESS division's fortunes revive
Hewlett-Packard (HP) is focusing on growth in 2005 after posting positive results for its fourth quarter and year end, and turning around its flagging Enterprise Storage and Servers (ESS) division.
The vendor reported an eight per cent increase in turnover for the quarter to $21.4bn, compared with $19.9bn for the same quarter the previous year.
Full-year turnover stood at $79.9bn, compared with $73.1bn last year. Pre-tax profit for Q4 stood at £1.3bn, compared with $1bn in 2003, with full-year profit reaching $4.2bn, compared with $2.9bn in 2003.
ESS produced a profit of $107m for Q4 after suffering a $208m loss in Q3. At the time HP chief executive Carly Fiorina highlighted problems with channel management in Europe, including "channel compensation, overly aggressive discounting and the transition to a centralised claims process".
Commenting on the latest results, Fiorina said in a statement: "After a challenging Q3, I am pleased at the steady improvement in Q4. [ESS division has] returned to profitability.
"In addition to executing on our current business, we strengthened our competitive position in Q4 with significant new offerings in storage, blade servers, imaging and printing and digital entertainment.
"In fiscal 2005, our focus is on disciplined execution, accelerating profitable growth and leveraging our unique portfolio." Douglas Hayward, senior analyst at Ovum, said the results are good news for the vendor.
"Margins of five per cent don't put HP in the danger zone," he said. "It's good to see software emerging from the woods, with operating margins improving sequentially throughout the year."