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HP: Notebooks Boost PC Segment Revenue

2/20/2004 09:31:00 AM Eastern

Palo Alto, Calif. — Fueled by a 52 percent fiscal first quarter notebook computer unit-growth surge and a notebook revenue increase of 42 percent, both year-over-year, Hewlett-Packard recorded a 20 percent jump in its personal systems group revenue for the three months.

PC segment revenue hit $6.2 billion, up from $5.1 billion in the fiscal year’s initial three months, while first quarter PC group operating profit nearly doubled in the same time frame, reaching $62 million, compared with a year-earlier $33 million.

Overall personal systems group unit sales climbed 23 percent in the first quarter, compared with the year-ago period, while desktop revenue increased 11 percent year-on-year, including improvement in average selling prices, and handheld revenue jumped 25 percent. The personal systems group is HP’s largest dollar-volume segment.

'We grew revenue in both desktops and notebooks almost twice as fast as our nearest competitor for the second quarter in a row,' said Carly Fiorina, chairman/CEO.

HP imaging and printing group, namely printer supplies such as ink cartridges — and its second largest dollar-volume segment — reported record first quarter revenue and operating profit, reflecting steady supplies business growth and good holiday sales to consumers.

Supplies segment revenue reached $5.9 billion in the first quarter, ended Jan. 31, up 6 percent from the $5.6 billion recorded in the year-ago three months. Earnings from operations hit $968 million in the first three months, up 6 percent, compared with $911 million year-on-year.

Personal LaserJet unit shipments increased 22 percent year-over-year, while color LaserJet units grew 27 percent. All-in-one and photo printers shipments grew 84 percent and 41 percent year-over-year, respectively, while digital camera unit shipments increased 42 percent over the prior-year period.

HP enterprise systems segment, pushed by strong revenue growth in its hardware businesses, grew 5 percent in the first quarter, coming in at $3.9 billion, up from $3.7 billion in the same quarter a year ago. Segment operating profit for the three months moved into the black, totaling $108 million, compared with a loss of $82 million the previous year.

'HP delivered a solid quarter,' said Fiorina about a 9.2 percent first three month consolidated sales increase, which reached $19.5 billion, from $17.9 billion in the first three months a year ago.

Consolidated operating profit rose 30 percent, to $1.1 billion, from $879 million year-on-year. Excluding special items, first quarter operating profit increased 23 percent year-over-year, to $1.4 billion, from $1.1 billion.

Net income reached $936 million if the first three months, up from $721 million in the first quarter of the previous year. Excluding special items, net earnings for the first quarter were $1.1 billion, up from $877 million.