Hewlett-Packard reported its first full-year profit since acquiring Compaq a year and a half ago. It also more than doubled its fourth-quarter profit compared with a year ago. Still, the company is feeling the pinch from lower margins. "Profit was impacted by a greater mix of low-margin products," CFO Bob Wayman said during the company's earnings call.
The pricing environment has become intense as business and personal systems become more of a commodity, chairman and CEO Carly Fiorina said in the same call. "The market is increasingly one where the leader wins and everyone else loses."
HP posted net income of $2.5 billion on revenue of $73.1 billion for its fiscal year, ended Oct. 31. A year ago, it had a $928 million loss on $72.3 billion in revenue. Its personal-systems group led the return to profitability, with a $19 million profit for the year, up from a loss of $372 million a year ago. Imaging and printing reported a profit of $3.6 billion on revenue of $22.6 billion, up from $20.4 billion. Services profits were flat at $1.4 billion on revenue of $12.3 billion.
All segments of HP's business, with the exception of corporate investments, were profitable during the company's fourth quarter, when it reported net income of $862 million on $19.8 billion in revenue, up from a net income of $390 million on revenue of $18.0 billion in its fourth quarter last year.