H.P. 2Q Profits Up 5 Percent with No Help from PCs

H.P. released its latest financial stats showing profit is up 5 percent for the electronics giant. However, like many of its counterparts, PC sales are still lagging putting a damper on its most recent earnings and will continue to inhibit growth in the future.

The company’s second quarter results rose 5 percent to $2.3 billion at $1.05 cents a share from last year’s $2.2 billion and 91 cents per share. Net revenue climbed 3 percent to $31.6 billion from the prior year period.

Worries over the after-effects of the earthquake/tsunami in Japan, low operating profits and the slow sales of PCs revised the forecast for the current quarter. A similar trend has been seen across the board, causing leading industry efforts to examine the root cause of the halt in PC sales.

Some initially attributed the trend to the increasing popularity of tablets. However, others recently found the release of Windows 7 and the subsequent jump in PC sales that followed are most likely to blame for the recent drop, particularly higher-end Windows consumer laptops (notebooks) over $500.

But not to fall behind in the hot tablet market, the Times wrote that the company plans to sell a tablet computer this summer. Also, Léo Apotheker, H.P.’s chief executive laid out a plan in March to grow the company’s considerably smaller corporate software business and expand into the cloud to compete with industry leaders like I.B.M. and Oracle.

Apotheker said in a news release, "H.P. executed well and delivered a solid quarter."

He added, "Our enterprise strategy, with services at its core, is focused on higher value-added solutions. Today we are accelerating our efforts to align our services business model to our long-term strategy to deliver unprecedented value to our customers and a better return for our shareholders."

Vernon Computer Source and its U.K. affiliate Hamilton Rentals carry the largest IT rental fleet in the world, including an extensive collection of H.P. products. From Notebooks, ProBooks and Elite Books among our laptop rental fleet to H.P. Proliant servers and racks, we’re still consistently serving our corporate clients with H.P.’s line of IT supplies that continues to be a favorite among businesses.

"In the second quarter, we saw continued strength in the enterprise with combined revenue from our commercial businesses up 8 percent year over year," said Cathie Lesjak, HP executive vice president and chief financial officer. "We again expanded our margins and increased both earnings per share and cash flow from operations double digits year over year."