HP prints its way to a profit in Q4, announces layoffs

Hewlett-Packard continued to rely on its strong printing and imaging division to keep up the health of its overall business in its fourth fiscal quarter, as its PC, server and storage products again suffered from weak demand.

HP posted revenue of $18 billion for the fourth quarter, which ended Oct. 31, the company said Wednesday in a statement. This compares to the combined revenue of $18.2 billion from HP and Compaq in the same quarter last year. HP completed its acquisition of Compaq earlier this year.

HP also said Wednesday that it would lay off an additional 1,100 workers as a result of the merger, in addition to its most recent target of 16,800. Most of the additional job cuts will be made in Japan, said Carly Fiorina, HP chairman and CEO, during a conference call with press and analysts after the earnings results were released. "I am pleased with our performance when you consider the continued weakness of the IT market," Fiorina said.

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Hewlett-Packard continued to rely on its strong printing and imaging division to keep up the health of its overall business in its fourth fiscal quarter, as its PC, server and storage products again suffered from weak demand.

HP posted revenue of $18 billion for the fourth quarter, which ended Oct. 31, the company said Wednesday in a statement. This compares to the combined revenue of $18.2 billion from HP and Compaq in the same quarter last year. HP completed its acquisition of Compaq earlier this year.

HP also said Wednesday that it would lay off an additional 1,100 workers as a result of the merger, in addition to its most recent target of 16,800. Most of the additional job cuts will be made in Japan, said Carly Fiorina, HP chairman and CEO, during a conference call with press and analysts after the earnings results were released. "I am pleased with our performance when you consider the continued weakness of the IT market," Fiorina said.

Net income came in at $390 million, or $0.13 per share, compared with a combined HP/Compaq net loss of $505 million, or $0.17 per share, in last year's fourth fiscal quarter.

Pro forma earnings per share were $0.24. Consensus from analysts polled by Thomson Financial/First Call was that HP would post pro forma earnings per share of $0.22 and generate $17.3 billion in revenue.

The pro forma earnings figure reflects a $331 million adjustment on an after-tax basis, or 11 cents on a diluted per share basis, that includes a $150 million restructuring charge; $151 million of amortization of goodwill and purchased intangible assets; and $155 million for other merger-related items.

The printing and imaging business churned out $5.6 billion in revenue for the fourth quarter, marking a 12% increase year-on-year. HP's personal systems unit, which includes PCs, workstations, notebooks and handheld PCs, was down 6% year-on-year to $5.1 billion

HP's flagging enterprise business, which includes servers, software and storage products, continued to show losses. Revenue declined 5% compared to the same quarter last year to $4.1 billion and an operating loss of $152 million.

The company's services business -- a key driver for its merger with Compaq -- also fell in the quarter. It declined 3% year-on-year to $3.1 billion in revenue.

HP expects to post revenue of $18.4 billion and pro forma earnings per share of $0.27 for its first fiscal quarter of 2003, according to the statement.

The IDG News Service is a Network World affiliate.