Home PC, Server Sales Drive HP Profit Up 17%, Beating Consensus

Hewlett-Packard Co. said fiscal second-quarter profit rose a better-than-expected 17%, driven by higher sales of home personal computers and the servers that run Internet sites.

Profit from operations grew to $899 million, or 87 cents a share, from $766 million, or 73 cents, a year ago on a 15% rise in revenue to $12 billion. Analysts were expecting 82 cents on average, according to First Call/Thomson Financial. The latest figures exclude one-time restructuring items and results of HP’s medical-equipment and electronic-measurement businesses, which it is spinning off as a new company, Agilent Technologies Inc.

HP’s revenue from home PCs climbed 85% and sales of profitable Unix servers rose 26%. Sales of printers and related products such as toner cartridges rose 13%. That business is Hewlett-Packard’s most profitable, accounting for 61% of operating profit in fiscal 1999. Notebook computer sales nearly tripled in the recent quarter. Storage system revenue fell.

At Agilent, fiscal second-quarter profit rose to 32 cents a share, before a one-time gain of 4 cents for selling certain investments, matching the average estimate of analysts polled by First Call/Thomson Financial. Sales rose 24% to $2.49 billion. Including the gain, profit was up 5.7% to $16 million, or 36 cents a share.

HP will complete its spinoff of Agilent on June 2, when it will distribute its 380 million shares to shareholders of record as of May 2.

Shares of Palo Alto-based HP closed up $4.50 at $138.50, and Agilent rose 31 cents to close at $88.50, both on the New York Stock Exchange, before the earnings were released.