Hewlett-Packard Co could not continue growing at the breakneck rate that it expanded at in its fiscal first quarter, and there is a significant slowdown in the second quarter figures, even if most of its rivals would give the chairman’s eye teeth for a 41% jump in already very healthy profits on 18% sales growth – but the market was predictably picky and the shares, after a delayed opening because of an order imbalance caused by too many sellers trying to catch market-makers’ eyes at the same time, were down $4 to $67 after the first trade after the opening. Commenting on the figures, the company says demand for its products and services remains strong in the half, with orders for the quarter up 26% on the year ago figure at $8,100m. US orders rose 19% to $3,500m while orders outside the US jumped 33% to $4,600m, making the foreign arm of the business significantly bigger than the domestic. Second-quarter turnover growth was limited somewhat too by the effects of several product transitions and some production and supply constraints – particularly component shortages. It is working with its suppliers to address availability issues and is focusing on improving production planning to meet demand more effectively, it says. Despite the big jump in profits, the company says pricing pressures continued across its markets, although it still sees a lot of opportunities for profitable growth in the current business environment, particularly in multi-user computer systems, personal computers, where it is showing all but the long-time market leaders a clean pair of heels, and in printers – and believes it is in a good position to compete for them. Product transitions included some new product introductions that occurred late in the quarter and in May, and turnover growth from these will not be recorded until the third quarter. The computer business took $6,400m of orders in the second quarter, up 28% from a year ago, and it saw broad-based growth in personal computers, HP-UX multi-user systems, LaserJet printers and customer support services. Orders in the electronic components business rose 25% in the latest second quarter. Medical product orders rose 11% and the analytical products business had 8% second-quarter order growth, which explains why what was once the biggest part of the company’s business is becoming relatively more and more vestigial. Several big new-product roll-outs are planned for this half.
