Hewlett-Packard (HP), a Palo Alto, Calif.-based maker of computers and printers, saw a big jump in fiscal third-quarter profits—due largely to Chief Executive Officer Mark Hurd’s extensive cost-cutting initiatives—and the firm boosted its profit forecast for the fourth quarter as well as the entire fiscal year, The Wall Street Journal reports.
HP also reported a revenue increase of 5.4 percent for the quarter, meeting its projected annual sales rate of between 4 percent and 6 percent, according to the Journal.
HP’s entire portfolio of business divisions reported profit and sales growth in all areas for the third quarter, according to the Journal. The company’s fiscal third quarter was the three-month period that ended on July 31, according to the Journal.
If the computer giant continues on its increasing profitability path, HP could report higher revenue than rival IBM, the Journal reports.
Hurd’s cost-reduction efforts, as well as a restructure of the business, took effect in July 2005, just months after he took the chief executive reins at HP in March of the same year, the Journal reports.
On top of HP’s increase in profits, the company also said it approved a share buyback worth $6 billion—the firm’s largest buyback ever—and its shares shot up in after-hours trading, according to the Journal.
HP saw its net income increase from $73 million in last fiscal year’s third quarter, or roughly 3 cents per share, to $1.38 billion, or approximately 48 cents per share, this year, the Journal reports.
Not including the payback of intangibles, HP took in $1.5 billion, or roughly 52 cents per share in earnings, beating Wall Street predictions, according to the Journal.
Hurd called the quarter “solid” in a conference call with reporters, the Journal reports.
HP plans to record revenue of $24.1 billion for the current quarter, which ends in October, as well as operating earnings of between 61 and 63 cents per share, according to the Journal. The company expects to post operating earnings of between $2.31 and $2.33 for the full fiscal year, the Journal reports.
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