An HP first quarter without 3000 sales turned out some enterprise profits

HP reported weakness in its Unix server business, but its first quarter 2004 numbers showed the company’s enterprise systems business remained in the black for the second straight period. Q1 of 2004 was the first period since the early 1970s that HP couldn’t book any HP 3000 business, but since the 3000 channel got slammed with orders at the very end of last fiscal year, revenues from enterprise systems probably contained the last dollars sent to HP for servers. HP had told customers they could expect orders to be honored through November and systems to be shipped through January.

HP’s Enterprise Systems Group, which sells both hardware and software, had revenue of $3.9 billion for the period, a 5 percent increase year over year. More importantly, the unit that sells HP’s replacements for HP 3000s had net income of $108 million after posting a loss of $82 million in the year-ago quarter. But HP said Unix revenue declined 13 percent from a year earlier, reflecting intense pricing pressure. HP 9000 server revenue was flat, while another product with a shrinking lifespan, HP’s Alpha servers, saw revenue decline 32 percent from a year earlier.

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