Hewlett-Packard Co is such a phenomenally tightly-run ship these days that after just one quarter of underperformance, it is back surprising the market again with earnings per share for its fiscal first quarter up 16% where the market had expected the number to be about flat with last year’s figure. Orders for the period to January 31 rose by 9% to $11bn and would have been about two percentage points higher without the effects of currency exchange rates. US orders rose 7% to $4.2bn while orders from outside the US climbed 9% to $6.8bn. Computer orders jumped 10% to $9.1bn. Revenue in the US advanced 14% to $4.3 while sales from outside the US rose 9% to $6bn. The company says it continued to improve asset management and to control costs in its first fiscal quarter, but warned that it faces difficult comparisons in the current – second – quarter. Chief financial officer Robert Wayman said the first quarter net profit of 8.9% is wonderful – but the competitive environment will not allow such profitibility for very long. Some international markets were sluggish, but the company did not identify them. Wayman said gross margins are not expected to show the same rate of improvement going forward as they did in the first quarter of fiscal 1997, when the gross margin rose to 35%, from 32.8% in the fourth quarter of 1996. Chairman Lewis Platt echoed this, saying the company expects an extremely challenging competitive market in coming months and that it intends to manage expenses and assets carefully.
Unix workstations declined
Orders for HP LaserJet printers grew moderately during the quarter, with the recently-introduced HP LaserJet 6P printer being very well received, the company said. The HP 9000 multi- user Unix servers achieved a good order increase in the quarter, with growth driven by the HP 9000 K-Class and DClass servers and strong demand from the telecommunications market. But orders for Unix workstations declined, and the company reduced the prices of workstations in January to improve the competitive- ness of its offering. Workstations using the Pentium Pro microprocessor and Windows NT achieved good growth. Among its other businesses, orders at the medical products group improved 6%, with increases reported in all regions. Orders in the chemical analysis business rose 12%, with particular strength in liquid chromatography products, but the components business fared badly, with orders falilng 12%, although the company said that it was encouraged by growth of 52% in components orders against the 1996 fourth quarter. Quarterly orders in the test and measurement business increased 5% over the very strong year-ago period, and emphasis on the communications market continued to yield good results, it says, with excellent demand for communications test products and synchronization systems. Orders for semiconductor test equipment declined, but that was against very strong orders in last year’s first quarter and they were improved compared with the fourth quarter of fiscal 1996. The computer support and services business achieved very good growth, with on-site hardware support and software support seeing healthy increases all around the world. Services such as selective facilities management, financing and technology management continued to achieve good market acceptance.