Global Sources
EE Times-India
Stay in touch with EE Times India
 
EE Times-India > Manufacturing/Packaging
 
 
Manufacturing/Packaging  

HP CEO: Business is stabilising

Posted: 21 Aug 2009     Print Version  Bookmark and Share

Keywords:HP Q2 results  software  PC sales  semiconductor 

Hewlett-Packard Co.'s net profit may have fallen considerably in Q3, but a financial analyst said the results—including a 2 per cent y-on-y increase in PC sales and possibly record inventory lows—bode well for semiconductor suppliers.

HP saw its GAAP net profit for the quarter ended July 31 fall 19 per cent as a record Rs.6,350.26 crore ($1.3 billion) profit from services and double-digit sales growth in China were not enough to offset revenue declines in PC, software and servers, the company said.

"The PC supply chain has reached the leanest levels of inventory ever, in our opinion," wrote FBR Capital Markets analyst Craig Berger in a research note. Any seasonal uptick in demand should lead to a healthy chip pull through in the third and fourth quarters of calendar 2009, Berger wrote.

Companies such as Marvell, International Rectifier, LSI Corp., Fairchild Semiconductor and ON

Semiconductor should benefit from improving PC demand in Q3 and grow that portion in the high-single-to-low double digits sequentially, Berger added.

PC hardware and storage days of inventory (excluding Dell) fell by one day in Q2 and are now slightly below all-time trough levels set in Q3 04 and the Q3 07, according to Berger.

The analyst also said that analogue chip stocks should benefit from stronger-than-expected quarterly results reported by Analog Devices Inc.

HP said its quarterly net revenue fell to Rs.1.34 lakh crore ($27.5 billion), down 2 per cent from the year-ago period. Revenue was up 4 per cent when adjusted for the effects of currency fluctuations.

The PC maker posted net earnings of Rs.7,815.70 crore ($1.6 billion), or 67 cents per share, in accordance with generally accepted accounting principles (GAAP), down from Rs.9,769.63 crore ($2 billion), or 80 cents per share, in the year-ago quarter, the company said.

Non-GAAP operating profit was Rs.14,654.44 crore ($3 billion), or 91 cents per share, up from 86 cents per share in the prior-year period, HP said. Non-GAAP financial information excludes Rs.2,774.57 crore ($568 million) of adjustments on an after-tax basis, or Rs.11.72 ($0.24) per diluted share, related primarily to amortisation of purchased intangible assets, restructuring charges and acquisition-related charges, HP said.

Recovery on the way
"Business is stabilising, and we are confident that HP will be an early beneficiary of an economic turnaround and will continue to outperform when conditions improve," said Mark Hurd, HP chairman and CEO, in a statement.

Revenue grew 8 per cent year-to-year in the Americas to Rs.61,548.64 crore ($12.6 billion), HP said. Revenue in China grew by double-digit percentage, HP said, but declined in other regions of the world. Revenue from outside of the United States accounted for 62 per cent of total revenue, HP said.

Services revenue increased 93 per cent to Rs.41,520.91 crore ($8.5 billion) due primarily to last year's acquisition of Electronic Data Systems Inc. (EDS), HP said. Services operating profit was Rs.6,350.26 crore ($1.3 billion), or 15.2 per cent of revenue, up from Rs.2,769.69 crore ($567 million), or 12.9 per cent of revenue, in the prior-year period, HP said. The EDS integration is tracking ahead of plan, the company said.

HP's enterprise storage and servers business reported total revenue of Rs.18.07 crore ($3.7 billion), down 23 per cent year-to-year, the company said. Software revenue declined 22 per cent to Rs.4,137.44 crore ($847 million), while revenue from its personal systems group fell 18 per cent to Rs.41,032.43 crore ($8.4 billion). Imaging and printing group revenue declined 20 per cent to Rs.27,843.43 crore ($5.7 billion).

HP remains the No. 1 supplier of PCs worldwide. The company projected revenue for the current quarter to be about Rs.1.45 lakh crore ($29.7 billion), which would be an increase of 8 per cent sequentially.

- Dylan McGrath
EE Times





Comment on "HP CEO: Business is stabilising"
Comments:  
*  You can enter [0] more charecters.
*Verify code:
 
 
Webinars

Seminars

Visit Asia Webinars to learn about the latest in technology and get practical design tips.

 

Go to top             Connect on Facebook      Follow us on Twitter      Follow us on Orkut

 
Back to Top