Hurd: Diversification Helps HP Weather Economic Storm

Speaking Wednesday at HP's annual shareholder meeting in Boston, Hurd made no specific mention of nor was he questioned by shareholders about the U.S. recession or turmoil in global markets. But he did note that because HP does so much of its business in Europe, the strength of the Euro against the sliding dollar is helping the company.

"This broad geographic footprint is an advantage for us," he said. "We can take advantage of the diversification in currencies and markets."

Hurd noted that HP emerged as the world's largest IT company based on its fiscal 2007 revenues of $104.3 billion. He said that in 2007, 41 percent of HP's revenue came from Europe, 17 percent from Asia, 33 percent from the U.S. and 9 percent from Canada and Latin America.

Additionally, Hurd explained to shareholders that the Imaging and Printing Group generated 27 percent of HP's total revenue last year, the Personal Systems Group contributed 33 percent; Enterprise Storage and Servers 18 percent and HP Services added 16 percent. HP software and financial services rounded out the revenue numbers.

Hurd reiterated his ongoing theme that HP needs to grab more of the annual global IT market, pegged at $1.2 trillion. He said that the global demand for digital content is doubling every 18 months and that HP needs to aggressively target that opportunity.

"We are shifting our portfolio to drive growth and are aligning our portfolio to margin rich opportunities for investors," he said. "We continue to look for opportunity [for higher gross margins] in software and in services."

Hurd said that HP intends to bundled more software into its products and will continue to drive increased attach rates as a way to increase margins.