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ShareSan Francisco: Hewlett-Packard Co tripled the size of its share repurchase program to $12 billion, as a strong performance in China and improved profit margins in its services business helped boost quarterly earnings.
The fiscal fourth-quarter results released on Monday were in line with preliminary figures that HP gave two weeks ago, which had topped Wall Street's estimates at the time. Shares of HP fell slightly in after-hours trading.
HP, a hardware and technology services company that is a bellwether for IT spending, has been more cautious than some of its peers in predicting an economic turnaround.
Chief financial officer Cathie Lesjak called the fourth-quarter results "solid." She said HP was seeing recovery in the United States, particularly in the consumer business. Lesjak said the strength of a recovery next year was largely dependent on demand in Europe, which continues to be weak.
"How robust that is going to be is still to be seen, and it really comes down ... to EMEA," she told Reuters in an interview. HP's services revenue rose 8 percent, and the company said signings were "strong," putting it in good position for next year.
PC units rose 8 percent, although revenue fell 12 percent,as the world's No. 1 PC maker continued to take market share. PC revenue in China jumped 40 percent.
Kaufman Bros analyst Shaw Wu said HP''s report showed hints of recovery in a number of its business units, including PCs and printers.
"They're basically pointing to year-over-year growth in the January quarter," Wu said. "It's a good sign."
HP's diversified business model, recurring revenue streams and focus on cost controls have provided it with a solid cushion during the downturn.
Although its print business has struggled, PCs and servers have performed relatively well, even as HP continues to shift its focus to IT services following last year's purchase of EDS.
HP raised its stock repurchase plan by $8 billion from $4 billion.
HP reported a net profit of $2.4 billion, or 99 cents a share, in its fourth quarter, up from $2.1 billion, or 84 cents a share, in the year-ago period.
Excluding items, HP earned $1.14 a share.
Revenue fell 8 percent to $30.8 billion.
As it forecast earlier this month, HP expects fiscal 2010 earnings, excluding items, of $4.25 to $4.35 a share on revenue of $118 to $119 billion.
Shares of Palo Alto, California-based HP closed at $51.02, up 1.96 percent, on the New York Stock Exchange and fell to $50.71 after hours.
