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HP's Storage Sales: Not Horrible

While Hewlett-Packard Co.'s (NYSE: HPQ) overall third-quarter earnings results were a deep disappointment, its storage business showed some promise during the quarter, according to analysts -- even though its storage sales dropped 8 percent quarter-over-quater (see HP Q3 Shows Strength in Disk Storage).

As the computer giants main business unit -- PCs -- dipped into the red with a $56 million loss, the company showed 6 percent growth in storage compared with the same quarter last year. Meanwhile, HP's enterprise software sales were down 8 percent compared to the third quarter a year ago, but up 6 percent sequentially. HP said sales of its OpenView software grew year-over-year.

Compared with the performance of the rest of its business, HP’s storage results weren’t horrible, analysts say. But when examined in the context of its competitors' gains, HP certainly seems to be losing share.

While HP’s storage revenues dropped sequentially, rival EMC Corp. (NYSE: EMC) saw its revenues grow 7 percent sequentially, and Network Appliance Inc. (Nasdaq: NTAP) yesterday reported a revenue increase of 26 percent for its most recent quarter (see EMC Sinks Despite Hiking Profits and NetApp Pounds Out Profits).

"EMC took share from HP on a sequential basis," says A.G. Edwards analyst Shebly Seyrafi.

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