HP boosts computer industry with rising profit

The technology industry breathed a sigh of relief on Wednesday, after the world's largest computer manufacturer, Hewlett Packard, announced a 20% jump in quarterly profit. The Californian company said that revenues and income had risen significantly from this time last year, in what many saw as the strongest sign yet that the economic slump's impact on technology spending was almost over. Revenues for the first quarter of 2010 were up 8% to $31.2bn (£19.9bn), with profits rising to $2.3bn - up from $1.9bn a year ago. The company also said it was expecting more signs of recovery in the coming year, with projected earnings narrowly ahead of expectations. "HP is well-positioned to outperform the market," said chairman and chief executive Mark Hurd, who has worked to cut costs at the company since taking over in 2005. The growth largely came from HP's computer and printer manufacturing businesses, as consumers - who had been reticent about purchasing during the downturn - started buying again. While figures released by industry analysts Gartner suggested that shipments in western Europe were flat, the company experienced what Hurd called "accelerating market momentum". That could be partially due to the impact of Microsoft's Windows 7, which launched last autumn and gave many PC manufacturers a boost by encouraging shoppers to purchase new hardware. The company's services business - which expanded significantly in 2008 with the $12.6bn purchase of EDS - did not enjoy a revival, however, with revenue falling by 1%. HP's results will please investors and analysts, but they have not been without its costs. The company has cut tens of thousands of jobs in the past two years, including 25,000 as a direct result of the EDS acquisition, and plans a further 8,600 by October. Last month more than 1,000 HP staff who work for the Department of Work and Pensions took strike action in protest at job losses. Shares rose marginally in after hours trading, to 50.12.