Strong rebound for HP as it prepares for rush

Steve Dinneen
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HEWLETT-PACKARD (HP) is bracing itself for a surge in demand as the world’s largest tech firm by sales smashed analyst expectations.

After strong quarterly results the US computer firm raised its full-year earnings outlook on demand for personal computers and servers as well as a resurgence in its printing business.

Analysts say it is well placed to ride an expected surge in corporate spending in 2010 as businesses replace aged equipment.

HP reported an eight per cent jump in fiscal second-quarter revenue from its printing division, double the growth in the first quarter. The division accounts for about one-fifth of HP’s revenue but a third of operating profit. Higher-margin revenue from printing supplies climbed six per cent from one per cent previously.

Addressing concerns from analysts about a slight slowdown on unit sales of laser printers in the quarter, the company said demand is “very strong,” adding that it expects double-digit unit growth for both inkjet and laserjet printers for the year.

The company is now forecasting a profit, excluding items, of $4.45 (£3.09) to $4.50 a share in this financial year, up from a previous target of $4.37 to $4.44. Underscoring how corporate budgets are starting to loosen, HP’s revenue from industry-standard servers leapt 54 per cent.

Chief financial officer Cathie Lesjak said the company is outperforming its peers and not simply riding the wave of overall US economic recovery.