First quarter figures for systems and IT services vendor Hewlett-Packard showed a slight sequential growth over the company's fourth quarter, but sales still declined 8% to $11.4 billion year-on-year. Revenues for the period ending 31 January 2002 were down at most of HP's business segments, with its server, storage and software division reporting a 21% quarter-on-quarter crash in sales. A year ago that division had an operating margin of 2.3%, but in the latest quarter margins were running at a negative 8%.

The one area that showed positive growth was HP's IT services division, with a 2% rise over the year-earlier quarter. In fact, a 13% operating margin from services, alongside a 15% margin from printers and various cost-cutting measures, allowed the company to report company-wide profits up quarter-on-quarter from $141 million to $484 million.