HP posts gains but printer sales stutter

A WEEK after ousting chief executive Carly Fiorina, computer giant Hewlett-Packard said first-quarter earnings and sales both gained but its figures pointed to growing competition in its flagship printer division.

The company said it was pressing on with its search for a replacement for Fiorina, who engineered the $18.9bn (£10bn) takeover of Compaq Computer in 2002 but failed to wring enough benefits from the deal to satisfy the HP board.

The figures for the three months to January had been keenly awaited by analysts for a detailed insight into the company's financial health after it parted company with its high-profile boss.

The Californian group said net income rose 0.7% to $943m while sales gained 10% to $21.5bn. 'While we continue to make progress in growing our top line, there is work to be done to improve our profitability,' said chief financial officer Bob Wayman, interim chief executive.

Names thrown up by the search for someone to replace Fiorina would be kept secret, Wayman said, as publicity 'would only compromise our ability to attract the best candidate'.

The printer division, HP's most profitable unit, posted a 2.6% drop in operating profit to $932m as sales fell 13% amid greater competition-Dell Computer, which drove HP out of the top slot of personal computer sales last year, has also entered the printing arena.

Vyomesh Joshi, HP's head of printers, warned that margins in the segment would continue to come under pressure.

In the PC business, sales climbed 11% to $6.9bn, indicating no erosion in average selling prices during the quarter.