THE GALWAY-based unit of computer giant Hewlett Packard (HP) returned to profit last year in spite of a 26 per cent drop in revenues to $258.1 million.

Accounts just filed with the Companies Office show that Hewlett Packard Galway Ltd recorded a pretax profit of $7.8 million (€6.2m) following a $12.57 million loss in 2010, a positive swing of $20.3 million.

On Wednesday, Hewlett Packard globally reported a loss of $8.85 billion (€7bn) after a massive writedown of the value of its services business.

The figures for the Galway arm of the multinational show that revenues dropped by $94.9 million from $353 million to $258.1 million in the 12 months to the end of October 31st last.

The chief factor behind the firm returning to profit was an exceptional cost of $18.5 million towards additional pension payments in 2010 that did not recur last year.

The figures show that research and development (RD) spend at the company last year almost doubled from $10.7 million to $20.1 million. The directors’ report confirms that RD is now a major activity on site, with over 200 software developers employed. It says many of these developers are focused on next-generation platforms, in particular cloud computing.

Numbers employed at the firm last year increased from 268 to 378, with staff costs increasing from $26 million to $34.9 million.

The principal activity of the firm is the manufacture of computer software and computer documentation for export.

On the risks and uncertainties facing the firm, the directors pointed to the challenge of maintaining competitiveness in the face of rising energy and labour costs, especially in the context of comparison with other global locations.

HP employs 4,500 in Ireland, with most at the firm’s Irish headquarters in Leixlip, Co Kildare.