HP Profits Jump 25%

Hewlett-Packard has reported a 25% increase in profits in the fiscal first quarter. The computer maker benefited from an increase in spending by consumers and businesses.

The world's largest PC maker said Wednesday that net income for the quarter ended Jan. 31 increased to $2.32 billion, or 96 cents a share, from $1.86 billion, or 75 cents a share, the same period a year ago. Revenue rose 8.2% to $31.18 billion from $28.8 billion a year ago.

Higher revenue year-to-year from sales of PCs, servers, and printers offset flat sales in software and services. The increases showed HP benefited from an improving PC market in the fourth quarter of last year. Gartner and IDC reported in January that worldwide PC shipments in the quarter rose 22.1% and 15.2%, respectively.

HP shipped 26% more PCs in the quarter than a year ago, as revenue increased 20%. Server revenue rose 11%. HP's operating margin increased to 9.6% from 8.7% a year ago.

Mark Hurd, HP chairman and chief executive, said the company is "well-positioned to outperform the market" and raised the company's forecast. "The strength of our portfolio, leaner cost structure and accelerating market momentum give us the confidence to raise our full-year outlook," he said in a statement.

HP forecast fiscal 2010 revenue of $121.5 billion to $122.5 billion, up from its previous estimate of $118 billion to $119 billion. The company expects earnings per share in the range of $3.79 to $3.86, up from $3.65 to $3.75.

For the fiscal second quarter, HP forecast revenue of $29.4 billion to $29.7 billion and earnings per share from 89 cents to 91 cents.