Hewlett-Packard profit beats estimates

Hewlett-Packard Co., the world's second-largest maker of personal computers, reported net income of 1.38 billion dollars in the quarter ended July 31, Bloomberg News reported on Thursday.

The earnings this period surpassed analysts' predictions and extended over PC market leader Dell Inc., an indication that H-P is a much stronger competitor than it was two years ago, said the report.

The news prompted shares of the California-based company to rise as much as 6.7 percent. The stock rose 1.37 dollars to 35.80 at 11:16 a.m. in New York Stock Exchange composite trading after rising as high as 36.73, the biggest gain since February.

The profit increase was largely due to efforts led by Chief Executive Officer Mark Hurd on cost saving to undercut Dell on price while widening PC profit margins to the highest in four years,according to the report.

Shares of Hewlett-Packard had risen 78 percent since Hurd was named to replace ousted CEO Carly Fiorina in March 2005.

Hewlett-Packard sales rose 5.4 percent to 21.9 billion dollars on strong demand for PCs and printers, which together account for 59 percent of revenue. The company also yesterday announced a plan to buy back $6 billion in shares, the largest repurchase in its history.

By contrast, Dell CEO Kevin Rollins struggled to improve the company's image after consumers complained about service. Rollins said in July ``aggressive pricing'' and slowing demand would cause profit to miss analysts' estimates.

Shares of Round Rock, Texas-based Dell, have lost 24 percent this year.

Dell said last month that preliminary results showed a profit drop to 21 cents to 23 cents a share, missing analysts' estimates for a second straight quarter.

Source: Xinhua