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HP Reports Revenue Increase

May 17, 2011
PALO ALTO, CA—May 17, 2011—HP announced financial results for its second fiscal quarter ended April 30, 2011. Net revenue of $31.6 billion was up 3.0 percent from the prior-year period as reported and up 1.0 percent when adjusted for the effects of currency. Second quarter gross margins and operating margins were up 1.0 percent and 0.1 percent, respectively, year over year

“HP executed well and delivered a solid quarter,” said Léo Apotheker, HP president and CEO. “Our enterprise strategy, with services at its core, is focused on higher value-added solutions. Today we are accelerating our efforts to align our services business model to our long-term strategy to deliver unprecedented value to our customers and a better return for our shareholders.”

“In the second quarter, we saw continued strength in the enterprise with combined revenue from our commercial businesses up 8.0 percent year over year,” said Cathie Lesjak, HP executive vice president and chief financial officer. “We again expanded our margins and increased both earnings per share and cash flow from operations double digits year over year.”

Trends and regional performance

Results were largely driven by performance in the commercial sector as businesses continued to spend on technology. HP experienced uneven consumer performance across its product categories during the quarter with continued softness in consumer PCs across all geographies.

Second quarter revenue was up 2.0 percent year over year in the Americas to $13.8 billion. Revenue was down 1 percent in Europe, the Middle East and Africa and up 10 percent in Asia Pacific to $11.7 billion and $6.1 billion, respectively. When adjusted for the effects of currency, revenue was up 1.0 percent in the Americas, flat in Europe, the Middle East and Africa and up 4 percent in Asia Pacific.

Revenue from outside of the United States in the second quarter accounted for 66 percent of total HP revenue. HP saw accelerated growth in BRIC countries (Brazil, Russia, India and China) with revenue increasing 19 percent while accounting for 12 percent of total HP revenue.

Business group highlights

• Imaging and Printing Group (IPG) revenue grew 5 percent year over year with a 17 percent operating margin. IPG continued to deliver strong performance across the business with share gains in all printing categories and 41 percent year-over-year growth in commercial printer hardware units. IPG continued to drive innovation and momentum with the new ePrint platform, graphic arts and other commercial print solutions.

• Services revenue grew 2 percent year over year with a 15.2 percent operating margin. To improve long-term performance, HP is accelerating alignment of the services business with the company’s overall strategy, including making investments to drive more value-added solutions and migration to the cloud.

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