HP’s earnings underscores the company’s continued reliance on its Imaging and Printing Group, which accounted for $1bn in operating profit -almost 67 per cent of the company’s total operating profit of $1.7bn.
HP’s Imaging and Printing Group (IPG) revenue grew five per cent to $6.7bn. On a year-over-year basis, supplies revenue grew 10 per cent, commercial hardware revenue grew four per cent and consumer hardware revenue declined eight per cent.
"HP delivered another solid quarter," says Mark Hurd, HP chief executive officer and president. "We grew revenue, expanded margins and generated record cash flow. At the same time, we continued to remain focused on executing our strategy and investing in the company’s long-term success."
Hurd is now forecasting third-quarter revenue will be around $21.75bn, and full year revenue will be about $91bn, in line with current analyst consensus expectations.
During the quarter, on a year-over-year basis, revenue in the Americas grew 10 per cent to $9.7bn, revenue in Europe, the Middle East and Africa declined two per cent to $9bn, and revenue in Asia Pacific grew seven per cent $3.9bn.
However, when adjusted for the effects of currency, revenue in Europe, the Middle East and Africa grew six per cent, and 10 per cent in Asia Pacific, says Hurd.
Personal Systems Group (PSG) revenue grew 10 per cent year-over-year to $7bn, with unit shipments up 16 per cent. On a year-over-year basis, desktop revenue increased one per cent and notebook revenue grew 27 per cent.
Hurd says commercial client revenue grew three per cent year-over-year, while consumer client revenue increased 24 per cent. Operating profit was $248m, or 3.6 per cent of revenue, up from a profit of $147m, or 2.3 per cent of revenue, in the prior-year period.
Momentum in key growth initiatives continued, with colour laser printer shipments and printer-based MFP shipments up 38 per cent 44 per cent year-over-year, respectively.
HP Indigo Press printed page volume grew 42 per cent over the previous corresponding period. Operating profit was $1bn, or 15.5 per cent of revenue, up from a profit of $814m, or 12.7 per cent of revenue, in the 2005 period.