PC and software sales boost HP's revenue, profit

Hewlett-Packard's PC business and software sales from its Mercury Interactive acquisition helped produce net profit of $1.8bn (£912.8m), for a 29% increase, with a 16% boost in revenue in the fiscal third quarter, according to financial results released Thursday.

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Hewlett-Packard's PC business and software sales from its Mercury Interactive acquisition helped produce net profit of $1.8bn (£912.8m), for a 29% increase, with a 16% boost in revenue in the fiscal third quarter, according to financial results released Thursday.

HP's profit was $0.66 per share, on revenue of $25.4bn (£12.88bn) in the three months that ended 31 July, up from $0.48 a share, on revenue of $21.9bn (£11.1bn) in the same quarter last year. Profit in that quarter was $1.4bn (£710m).

Revenue from its Personal Systems Group, primarily desktop and notebook computers sold to consumers, grew 29% to $8.9bn (£4.51bn). Revenue from the HP Software group boosted revenue 74% to $554m (£281m), driven by sales from its $4.5bn (£2.28bn) acquisition of Mercury Interactive in 2006. Mercury was not yet part of HP in last year's third quarter.

HP is growing its software portfolio further with the acquisition, announced 23 July, of Opsware for $1.6bn (£811m). Expected to be completed in the current quarter, the deal will be HP's third largest acquisition behind Mercury and the $19bn (£9.6bn) acquisition of Compaq Computer in 2002.

HP CEO, chairman and president Mark Hurd credited cost discipline and lower component prices for some of the margin improvement, while chief financial officer Kathy Lesjak said expenses grew at only one-third the rate of revenue growth.

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