Buoyed by a sharp improvement in its software business, Hewlett Packard has reported a quarterly profit that beat analyst expectations.
The company reported net earnings of $2.3bn, or $0.86 per share, for the fourth quarter ending 31 Oct, compared to net income of $1.9bn the same quarter last year. Net revenue climbed 15% to $28.3bn.
The company took a $30m charge related to licensing HP camera manufacturing, distribution and design so that it can concentrate on its home photo printing and online photo services.
Annual net revenue was $104.3bn, a 10% growth on 2006, generating operating profits of $9.6bn.
The company's software revenue doubled year-over-year to $698m, according to chief executive Mark Hurd. He partly attributed the software rise to the acquisition of Mercury Interactive for $4.5bn last year.
Notebook revenue grew 49%, pushed strongly by the growth of mobile devices in emerging markets.
China is now becoming a key market for HP. The company’s PC and notebook division recorded a 100% growth in China, now the group's third largest market.
HP sells products in around 400 Chinese cities with more expansion planned, Hurd said. Overall revenue in the emerging BRIC (Brazil, Russia, India and China) markets grew 37%.
HP’s x86 blade server revenue grew 78%. The Enterprise Storage and Server group reported revenue of $5.2bn, a 10% increase over the previous year.
Despite steady growth across all segments, Hurd said there was more room to grow. "HP still has room to improve, but we like how we are positioned," he said.
The company estimates revenue to grow next year to $111.5bn.
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