NEW YORK (CNNfn) - Hewlett Packard Co. on Wednesday reported a fiscal first-quarter profit that was slightly ahead of Wall Street's expectations on revenue that rose 14 percent from the same quarter a year earlier.
Before one-time charges, H-P said it earned 80 cents per diluted share during the quarter from continuing operations. Analysts polled by earnings tracker First Call had expected H-P to earn 78 cents per share during the quarter.
Including charges, H-P (HWP: Research, Estimates) said its net income was $794 million, or 77 cents per diluted share during the quarter ended. That's down 10 percent from $882 million, or 85 cents per share, a year ago.
The company, which is the world's second largest manufacturer of computers and other electronic equipment such as printers and scanners, said first-quarter revenue rose 14 percent to $11.7 billion.
The current quarter's reported sales and earnings, as well as the comparison figures from the year-ago quarter, do not include results from Agilent Technologies (A: Research, Estimates), which makes test and measurement equipment for electronics, communications and health-sciences companies. H-P spun off Agilent in November.
"What's particularly gratifying to me is that we delivered these results at the same time we are reinventing the company," Carly Fiorina, H-P's newly-minted chief executive, told analysts and reporters during a conference call Wednesday evening.
Shares of H-P, which ended Wednesday's New York Stock Exchange session up 6-1/4, or 5 percent, at 131. In after hours trade, shares rose 1 to 132.
On track for fiscal 2000 growth targets
When H-P reported its fiscal fourth-quarter results in November, Fiorina, who took the helm of the Palo Alto, Calif.-based company last summer, said the company was aiming for top- and bottom-line growth in the range of 12 percent to 15 percent in fiscal 2000.
On Wednesday, H-P chief financial officer Robert Wayman reiterated that growth target.
"Given the strong first quarter, we are certainly hoping to come in at the high end of that range," he said.
And the first quarter's strong revenue growth -- which executives attributed largely to robust sales of PCs and growing sales in the Asia-Pacific region -- lend credibility to Fiorina's ability to turn the company around, according to A.G Edwards technology analyst Shelby Seyrafi.
"They grew at 14 percent," A.G Edwards technology analyst Shelby Seyrafi said in an interview on CNNfn's Street Sweep program Wednesday. "That's very impressive. I expected them to grow at 12 percent."
"She was very bold when she said that she would hit that 12 to 15 percent revenue growth number, and she is hitting it in the first quarter after she said it." Seyrafi said.
Merrill Lynch's Steve Milunovich agreed. "Clearly, Carly's actions are gaining some traction here," he said.
PC sales, growing strength in Asia drive growth
Net revenue in the United States during the quarter came in at $5 billion, up 12 percent year-over-year. At the same time, sales in the Asia-Pacific region surged 46 percent, coming in at $1.6 billion. Sales in Latin America also were up sharply, coming in 16 percent higher at $6.7 billion. While sales in Europe were up 7 percent at $$4.3 billion.
H-P said that sales in its computing segment -- which consists of systems including workstations, desktops, mobile computers, UNIX system and PC servers, storage and software -- grew 15 percent year over year, with PC and notebook shipments posting the most noteworthy growth.
Notebook shipments grew more than 200 percent in units, and, at 1.5 million, home PC shipments almost doubled compared with the year ago quarter, H-P said.
"Notebooks and home PCs were the shining stars," said Fiorina.
Moving further into 2000, Wayman said the company should be able to maintain that momentum in the home PC space by taking advantage of IBM and Packard-Bell's recent exit from the home PC market.
"It was just three or four months ago that IBM and Packard-Bell announced that they were getting out of this business, and it takes a while to capitalize on that change," he said.
John Jones, an analyst at Salomon Smith Barney, agreed.
"They're basically growing their units at almost 100 percent, and its predominantly because 13 points of market share in the U.S. has disappeared in the form of IBM and Packard-Bell," Jones said. "So for the next two or three quarters, it looks like very high growth rates can be sustained."
Server business on the ups
H-P's server business, which has been sluggish in recent quarters and which many analysts have seen as a wild card for the company moving forward, was improved overall, with particular strength in entry-level servers designed to run the UNIX operating system, which is widely used to run Web sites.
"In UNIX systems, we posted really excellent growth in the low-end, the sweet spot of the dot.com market," Fiorina said. "We've begun to turn things around in our server business, and new products are around the corner. We're seeing excellent growth in the Internet space, with tremendous customer acceptance of the L-Class, which spans the entry level and the mid-range."
"The fact that the UNIX business is showing a little bit of life here is encouraging," Merrill Lynch's Milunovich said. "They've still got a little ways to go, but they actually did a little better than I would have thought."
"That is a swing factor for them going forward," Milunovich added. "And it's pointing in the right direction for them."
Mid-range server sales were flat during the quarter, Fiorina said.
H-P's imaging and printing segment -- which comprises laser and inkjet printing and imaging devices as well as supplies and services -- grew 13 percent year over year, led by strong sales of supplies.
Executives note that H-P's DeskJet-brand printers continued to achieve strong unit revenue growth, with an accelerating shift to low-end products, which drives the printing supplies business.
H-P's IT services segment, which includes hardware and software services, outsourcing, consulting and customer-financing services, grew 14 percent year over year.