Mark Hurd, Hewlett-Packard’s chief executive, called on Tuesday in a pretty good mood.
As Mr. Hurd saw it, H.P. had just delivered a fine second quarter in which its sales and profits beat the expectations of analysts. (That is 20 times in the last 21 quarters that H.P. has trumped Wall Street’s earnings forecasts, so maybe the analysts need to set their bar a tad higher.)
“This was a very strong performance,” Mr. Hurd said, adding that it was a “broad-based, multiregion” success story, made all the more pleasing because so many parts of H.P. chipped in to the effort.
What else does one expect to hear from a good-spirited C.E.O.?
But H.P.’s showing still left one question unanswered: have corporations started that massive PC upgrade cycle that has been predicted now for many months?
Mr. Hurd used somewhat firmer language to address this question than his counterparts at Intel and Microsoft have done in recent weeks.
“I think you are seeing some strength,” Mr. Hurd said. “It may not be the market doubling or something like that, but I think you are seeing a fairly steady drumbeat of refresh. We feel good about it.”
Things sound like they are on the way up, sure, but I would hardly categorize Mr. Hurd’s comments as ebullient.
A first pass at H.P.’s second-quarter numbers shows its PC business growing 21 percent to $10 billion. Consumer PC sales rose 25 percent, while business PC sales rose 19 percent.
What is maybe a bit more intriguing is that desktop sales were up 27 percent, while laptop sales were up 17 percent. As Toni Sacconaghi, an analyst with Sanford C. Bernstein & Company, pointed out in a research note, that is the first time in at least 17 quarters that growth in desktop sales surpassed that of laptops.
Meanwhile, the sales of beefy workstations rose, as did the average price of PCs sold by H.P.
When companies start shelling out for more expensive, luxuriously configured desktops, they are usually providing the PC industry with a signal that a reasonably serious refresh is under way. They are investing in the workhorses of the next couple of years rather than just the laptops that provide enough juice to let people get by.
The corporate PC refresh question takes on added significance when you consider the state of H.P. and Dell, the top two business PC sellers.
H.P. just passed a quarter in which its total revenue rose 13 percent year-over-year, to $30.8 billion, while its profit jumped 28 percent, to $2.2 billion.
Server and storage sales rose 31 percent, to $4.5 billion, and printer and ink sales were up 8 percent, to $6.4 billion.
The strength from these groups more than made up for lackluster performances turned in by the software team — sales down 1 percent, to $871 million — and the services group — sales up just 2 percent, to $8.7 billion. (Services sure carried H.P. during the heart of the recession but have cooled off since. And how does a company with H.P.’s scale manage to sell less software during much better economic times?)
Overall, H.P. looks healthy and raring for a fight, while Dell, which reports financial results on Thursday, was still redefining itself at last check.
Dell has been battered from below by Acer and could face some very stiff competition from H.P. in the business PC market.
I asked Mr. Hurd if H.P. planned to be even more aggressive than usual in the business PC market in a bid to thwart any kind of comeback from Dell, which depends the most on sales of business computers.
Mr. Hurd said he would decline to take the bait on using visceral language to describe any looming battle, opting instead for: “We have some tough competitors out there, and we feel very good about our value proposition.”
While that sounds cordial enough, one gets the feeling that things could turn less civilized soon.