HP has reported earnings of $884 million for the second quarter of 2004, with strong software and hardware sales underpinning the figures.

The company's $884 million in net earnings, calculated in compliance with generally accepted accounting principles (GAAP), amounted to $0.29 per share, an increase of 32 per cent from the $0.22 per share reported in the year-ago quarter.

Revenue for the quarter was up by 12 per cent from the $18 billion the company reported in 2003's second quarter, surpassing $20 billion for the first time in the company's history, according to HP.

The company experienced "record second quarter revenue in PCs, enterprise hardware, software, services and imaging and printing," said HP CEO Carly Fiorina in a statement.

The company's Imaging and Printing division continued to be the company's most profitable, reporting an operating profit of $953 million on revenue of $6.1 billion. Revenue from printer supplies was up 15 per cent for the quarter, driven to a large extent by the adoption of colour printing in the workplace, Fiorina said in a conference call with analysts on Tuesday. "Colour is now going mainstream," she said.

HP's other sources of revenue, the Personal Systems Group and the enterprise-focused Technology Solutions Group, reported revenues of $6.0 billion and $7.7 billion respectively.

While revenue from HP's desktop and notebook products grew at 14 per cent and 26 per cent respectively, the Personal Systems Group managed to report an operating profit of only $45 million for the quarter, far less than the $400 million reported by the Technology Solutions Group.

Software was the fastest growing segment of the Technology Solutions Group. Led by an increase in sales of HP's OpenCall and OpenView products, the software division's revenue grew by 23 percent year-over-year.

HP's storage revenue, however, was down by 1 per cent for the quarter. Sales of the company's tape products declined during the period, Fiorina said.

HP's earnings were generally in line with analyst expectations. A survey of 22 financial analysts by Thomson First Call found that HP's non-GAAP earnings per share were expected to be $0.34, which was what HP reported by that measure. Analysts had expected the company to report revenue of $19.3 billion, and HP actually reported $800 million more than that.

HP shares were up nearly 4 per cent in after-hours trading, reaching $20.60 per share on the Inet ATS exchange on Tuesday.