updated 5/16/2007 6:28:00 PM ET 2007-05-16T22:28:00

Hewlett-Packard Co.’s second-quarter profit fell 7 percent despite a dramatic rise in sales of personal computers and servers, narrowly beating Wall Street’s forecast.

For the three months ended April 30, HP earned $1.78 billion, or 65 cents per share, compared with $1.90 billion, or 66 cents per share, in the same period last year.

The latest quarter’s results were weighed down by restructuring and other one-time expenses amounting to 5 cents per share. Last year’s second-quarter results were boosted by a tax settlement gain of 15 cents per share.

Sales in the quarter leaped to $25.53 billion, a 13 percent jump from the $22.55 billion HP rang up in the same quarter last year.

The increase was spurred partly by booming sales of laptop computers and servers. Revenue in the Personal Systems Group, which includes laptop and desktop computers, grew 24 percent to $8.7 billion, while sales in the Enterprise Storage and Servers unit climbed 8 percent to $4.6 billion.

The results would have provided Wall Street a pleasant upside surprise had HP not been forced to pre-announce its basic results last week after an employee accidentally sent an e-mail with the quarter’s financial details to someone outside the company.

After raising their estimates, analysts surveyed by Thomson Financial were expecting HP to earn, on average, 69 cents per share, excluding one-time charges, on $25.46 billion in revenue.

HP’s guidance Wednesday for the current quarter that was roughly in line with analyst estimates. Management anticipates sales of between $23.7 billion and $23.9 billion with profit of 60 cents to 61 cents per share.

HP is in the midst of a startling growth spurt, driven partly by aggressive market share gains at the expense of rival Dell Inc. in personal computers. HP recently supplanted Dell as the No. 1 seller of PCs worldwide, commanding 19 percent of the market in the first quarter compared to Dell’s 15 percent, according to market researcher IDC.

The company also has surpassed IBM Corp. as the world’s largest technology company by revenue, and said Wednesday it expects to pass an important milestone this fiscal year, cracking $100 billion in revenue for the first time in its history.

HP said it expects revenues of between $100.5 billion and $100.9 billion for the current fiscal year, with a profit of $2.51 per share to $2.53 per share.

Shares of HP, based in Palo Alto, Calif., gained 39 cents, or 0.9 percent, to $45.86, in after-hours trading. The stock had risen 46 cents to $45.21 in regular trading before the report.

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