Hewlett-Packard reported earnings that easily exceeded analysts' expectations and prompted the world's biggest technology company to raise its full-year forecast for the second time since the fiscal year began.
"We are seeing strong growth," CEO Mark Hurd told analysts on a conference call, after reporting that HP's profit rose 28 percent to $2.2 billion in its last quarter, compared with a year earlier, as sales surged 13 percent to $30.8 billion.
The company reported strong sales in markets around the world, which led Hurd and Chief Financial Officer Cathie Lesjak to say they don't expect the current economic turmoil in Europe to dampen HP's prospects for the rest of the fiscal year.
Sales rose in most of HP's key product segments, including PCs, printers and data center equipment. Revenue from tech services grew by a narrow 2 percent, compared with a year ago, while software sales fell 1 percent.
"Our growth this quarter was broad-based," Hurd said, adding that customers who appeared to be deferring purchases last year now seem ready to spend.
Lesjak said the Palo Alto company is now forecasting annual revenue to grow 8 to 9 percent over the previous fiscal year, when the recession put a damper on HP's sales. That forecast would put the company's 2010 revenue in the range of $123.8 billion to $124.9 billion.
HP's earnings in its second fiscal quarter, which ended April 30, amounted to 91 cents a share, or $1.09 a share after excluding one-time charges. Analysts were expecting earnings of $1.05 a share, excluding one-time charges, on revenue of $29.8 billion, according to a survey by Thomson Reuters. This is the second straight quarterly increase in sales for the company, considered a bellwhether for the technology industry.
With its broad portfolio of tech products and services, HP has benefited from the early stages of an economic recovery that includes an overall increase in consumer and corporate spending.
Businesses are starting to replace aging equipment, and many are deciding to invest in new computer systems to take advantage of new advances in software and cloud computing, said Ronald Gruia, an analyst at the Frost & Sullivan industry research firm. He said his own research shows more companies expect to increase their tech spending in the second half of this year.
HP's competitors have also reported an uptick in sales for PCs, printers, computer servers and other tech gear, although analysts say the markets for software and technology outsourcing services have been slower to show improvement.
The Palo Alto company has made several moves recently to expand its business, after trimming its workforce and making other spending cuts during the recession.
Just last month, HP announced plans last month to buy Palm, a Sunnyvale smartphone maker, for $1.2 billion. It also completed the $2.7 billion acquisition of 3Com, a maker of computer networking equipment whose products will help HP compete directly with networking giant Cisco.
HP shares, which fell 73 cents or 1.54 percent in regular trading to $46.79, rose nearly 2.4 percent in after-hours trading to $47.95.