HP Poised to Unseat IBM

In its fourth quarter, Hewlett-Packard's business divisions pulled together to deliver solid revenue and profit growth. Watch out, Big Blue

Hewlett-Packard (HPQ) has taken a big step toward laying official claim to the title of world's biggest tech company. On Nov. 16 the Palo Alto (Calif.) company reported fourth-quarter earnings that, thanks to all its business units performing well, exceed the annual sales IBM (IBM) is expected to post in its fourth quarter, which ends Dec. 31. "This has been a defining year for HP," a buoyant Chief Executive Mark Hurd told reporters during a conference call. And no, he wasn't referring to the pretexting scandal that dominated headlines earlier this fall.

Instead, Hurd was discussing fourth-quarter results that put to rest many of the questions that have dogged HP in recent years. For the past decade, investors and industry analysts have wondered whether the company had become too diverse to be manageable. For a lot of those years, nearly all of the company's profits came from its printer business—or more specifically, its hugely profitable ink cartridge business. But this quarter, all of the company's main businesses more than pulled their weight.

by Peter Burrows
BusinessWeek Technology