Technology giant Hewlett-Packard's fourth-quarter results beat analysts' expectations when they were released on Thursday night, although the company did have to take a charge of $1.5 billion (€1.28 billion) to compensate staff who will be leaving the company in the next 18 months.
Revenues grew 7 per cent year-on-year to $22.9 billion - no mean feat for a company of its size - and the performance was strong in almost every unit of its diverse businesses. HP employs approximately 4,000 people in Ireland at locations in Kildare, Dublin, Galway and Belfast.
"I feel very comfortable with the results," said Francesco Serafini, managing director of HP in Europe, Middle East and Africa. "It's another strong quarter on our journey to improve the top and bottom lines of the business."
That journey began in March of this year when Mark Hurd took over at the helm of the company. Mr Hurd, a 25-year veteran of NCR, replaced Carly Fiorina, a high-profile executive who departed after conflicts with the board over future strategy.
Mr Hurd was considered a safe pair of hands when he took over but he hasn't been afraid to make significant changes. He dismantled the company's customer solutions group which had sold technology directly into business and government accounts and re-assigned the sales people to other parts of the business.
The plan, announced in July, called for a reduction in headcount of 14,500, but this has subsequently risen to 15,300 - over 10 per cent of the workforce.
According to Mr Serafini this is largely due to the fact that more employees than expected sought the early retirement package offered in the US. A similar plan is on offer in Europe but he said HP had no forecast on how many staff may decide to avail of it.
Irish employees have benefited from significant bonuses that have been paid to remaining employees. The company is not revealing details of these, but Mr Serafini said "when we have a good performance, we will pay bonuses". He said they were the largest bonuses paid for several quarters.
The results show that the continued good performance has largely been driven by cost cutting. Despite this, Mr Serafini did not express any concern over the rising cost of doing business in Ireland. He said the Irish operations were important not only in a European context but in terms of their contribution to "HP's global supply chain".
HP added significantly to its Irish headcount as a result of its merger with Compaq in 2002, which itself had acquired Digital Equipment Corporation in 1998. Digital had closed manufacturing facilities in Clonmel and Galway in the 1990s, but still retained a significant software development team on the west coast which is now a European software centre for HP employing about 650. HP also inherited a call centre in Clonskeagh, Dublin which provides multilingual support to European customers.
HP itself had established an inkjet manufacturing facility in Leixlip in 1995, which now employs over 2,000. This campus is also home to the company's Irish corporate headquarters, HP Financial Services and the HP International Bank.
Another 150 are employed in Northern Ireland, providing sales and support to the local market.
The results are particularly pleasing for HP as all parts of the business have performed well. European revenues of $9.1 billion were up 8 per cent. "The results were very well balanced and not driven by one or two lines of business," said Mr Serafini.
Printers - still the cornerstone of the company's business - and related imaging products delivered $6.8 billion in revenues, up 4 per cent year-on-year. Revenues from sales to consumers in this group fell 4 per cent year-on-year but the actual numbers of printers it shipped grew by 8 per cent. This reflects a strategy to focus on cheaper printers that have a higher rate of ink usage and will thus generate significant revenue in supplies.
The results of the personal systems group, which sells PCs and laptops, were significant, particularly in light of Dell reporting shrinking revenues from desktop PCs last week. Despite what Mr Serafini calls "a very competitive market", PC sales grew 9 per cent by value and 13 per cent in terms of units shipped - largely at the expense of Dell.
"We are number one in EMEA and have improved our profitability and customer satisfaction," said Steve Gill, HP's managing director for the UK and Ireland. "That's not true for our two main competitors."
Mr Gill also said he was delighted with the performance of sales in Ireland, where he said HP is the "number one IT company and has won a number of awards for our hardware and services."
While the current round of cuts have delivered improved results, the next challenge for Mr Hurd and his senior team will be to formulate a strategy to build on that foundation.
