Hewlett-Packard’s (HPQ) last quarter was hailed as a testament to superior management and intelligent diversification. Much of the growth came from overseas, but that is supposed to be a hallmark of the new American corporation.

Net revenue rose 10% to $28 billion. Operating profit was up 20% to $2.5 billion. But, some of HP’s core businesses barely grew at all.

There was a time when the key engine of HP’s earnings was its printer operations. In the last quarter, they grew only 3% to $7 billion. The company’s server business was up only 5% to $4.7 billion.

The printer and server businesses are at the core of HP’s offerings to enterprises. While PC sales at HP did well, much of that revenue come from individual consumers.

If the critical hardware segments of HP’s overall revenue are no longer doing well, a downturn in business spending could actually move their quarterly revenue growth into negative territory. With the economy as it is, that could happen within a quarter or two.

Douglas A. McIntyre

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