HP's (HPQ) Q4 Profits Rise 14%

November 23, 2009 5:24 PM EST

Hewlett Packard Co. (NYSE: HPQ) reported its official fourth quarter results, showing 14 percent growth in quarterly profit due in part to strong margins in its services business.

Tonight's results were basically in-line with the preliminary results HP issued earlier this month when it announced it had agreed to acquire networking-supply maker 3Com Corp (Nasdaq: COMS). The profit growth was boosted by the rise in PC sales for the quarter.

The company's preliminary fourth-quarter Non-GAAP earnings of $1.14 per share is ahead of market consensus of $1.13. Sales for HP were $30.8 billion, compared with the market estimate of $30.36 billion.

HP raised its 2010 fiscal year sales guidance earlier in the month from $117-$118 billion to $118-$119 billion, versus the Street estimate of $118.10 billion. Adjusted earnings per share for the year move from $4.20-$4.30 to $4.25-$4.35, versus the consensus of $4.28.

"Solid execution drove exceptional performance for HP this quarter, fueled by significant growth in China," Mark Hurd, HP Chairman and CEO, said earlier this month. "We are delivering on our strategy and are well positioned going into 2010."

Revenue for the company fell 8.4 percent from the year-ago quarter; however this was offset by the company's growth in operating margin, which jumped to 10.2 percent from 8.2 percent tin the same quarter last year.

Revenue outside of the U.S. accounted for 64 percent of the company's total, while HP saw a 3 percent drop in sales in the Americas. China fourth quarter revenue was up more than 20%.

HP's Services segment was a bright-spot with revenues rising 8% to $8.9 billion and operating profits up to 16.2% to $1.4 billion. The Printing segment was a low-light with revenues declining 15% to $6.5 billion, but operating profits rising to 18.1%.

Shares of HP are slightly down after the close to $50.84 as the news came as no surprise to Wall Street.

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