Hewlett-Packard earnings climb 5%

Hewlett-Packard Co. reported a profit of $2.5 billion, or $1.10 a share, an increase of about 5% from a year earlier for a fourth quarter in which the tech giant was running largely without a chief executive.

The Palo Alto company said it generated about $33.3 billion in sales during the three-month period ended Oct. 31, an increase of about 8% from a year earlier.

The earnings report, issued Monday after markets closed, was rosier than analysts had predicted.

HP's new chief executive, Leo Apotheker — who came aboard only about three weeks ago — took a back seat to other company executives during a conference call after the earnings release.

He declined to discuss in detail his strategy for Hewlett-Packard, which has long relied on its imaging and printing group as its largest generator of revenue. During the quarter, printer unit shipments increased 14%.

But Apotheker did say that HP needed to build its software business, which accounted for only about 4% of revenue in the quarter. He said this could involve buying other companies.

Brian Marshall, an analyst with investment firm Gleacher and Co. in San Francisco, said the earnings report was a high note after the messy transition to Apotheker from former CEO Mark Hurd, who left under after an investigation into allegations of sexual harassment and expense report inaccuracies.

"They did exactly what they needed to do, both from a financial performance standpoint and probably more importantly from Leo Apotheker," Marshall said. "I thought he addressed all the topics he needed to — his initial weeks at the company, customers, employees and technology."

Marshall said Apotheker also addressed "what he's there to do, and that's build HP's Achilles' heel, which is software."

Joel Achramowicz, an analyst at Blaylock Robert Van in Oakland, wasn't as optimistic.

"They're hitting the numbers, but it looks like the same HP we've seen for the last couple of years," he said. "HP is still too reliant on printing. And you can't tell me that printing is going to explode again the way it did.

"It still feels like the company is on autopilot right now."

HP shares closed Monday up 76 cents, or 1.8%, at $43.25. In after-hours trading HP shares rose about 3% to about $44.50.


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