Cost of sales hits profits at Hewlett Packard’s Galway operations

Pre-tax profits at the Galway-based unit of computer giant Hewlett Packard (HP) last year plummeted in spite of revenues topping $413m.

New figures show that Hewlett Packard Galway Ltd recorded an 85% drop in profits — from $12.16m to $1.79m. This was in spite of revenues increasing by 32% to $413.79m in the 12 months to the end of October last. The profit dive arose from the firm’s cost of sales increasing at a faster rate than revenues, with cost of sales totalling $402.7m compared to $293.2m in 2013.

As a result of the high cost of sales and resulting low level of pre-tax profits, the firm’s corporate tax bill for the year totalled $1.45m compared to $2.1m in 2013.