For years, competitors of Hewlett-Packard have carped on about how the company makes most of its money out of ‘black dust’ – the millions of toner cartridges that it sells on the back of its printer business. But, in recent quarters, another non-electronic substance has been making an increasing contribution to HP’s bottom line. Over the past six months, according to the Wall Street Journal, there has been a 71% rise in the ‘interest income’ and other line on HP’s income statement, most of which comes from interest on the company’s cash pile. In its third quarter to July 31, for example, the company reported net income of $621m, of which $100m, or 16%, came from net interest income. But HP says that the rise in interest income has nothing to do with a change in company policy, and is merely the result of the current market climate. Improved asset utilisation, it says, has helped to expand the company’s cash pile to $5.3m, and the current slowdown in revenue growth means that the company is spending less than normal on business expansion.
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