Hewlett-Packard Tops Forecasts, Raises Outlook
Hewlett-Packard, the world's largest personal-computer maker, reported a higher quarterly profit as it sold more PCs and servers.
The company also raised its full-year fiscal 2008 revenue forecast, sending its shares higher.
Net income in HP's fiscal first quarter ended Jan. 31 increased to $2.13 billion, or 80 cents per share, from $1.55 billion, or 55 cents per share, a year earlier. Revenue advanced to $28.5 billion from $25.1 billion.
Excluding special items, profit was 86 cents per share. Analysts, on average, expected earnings before some costs of 81 cents per share and revenue of $27.6 billion, according to Reuters Estimates. HP in November had forecast first-quarter earnings of 80 cents per share before special items and revenue of as much as $27.5 billion.
Shares of the company hopped about 6 percent in extended trading Tuesday after finishing regular market hours slightly above the flatline.
"This positions the company well for 2008 and shows that they're able to execute even in a slowing economy." said analyst Shannon Cross of Cross Research. "They needed to do this (have a strong earnings report). They still had a slowdown from the printer side but the other parts of the business made up for it."
HP was helped by cost cuts and strong sales outside the United States as U.S. technology spending slowed on recession concerns. But HP faces a tougher environment this year as consumers and companies reduce spending on technology hardware, the bulk of HP's business, and competition with a resurgent Dell
"Our cost savings are significant and ongoing," Chief Executive Mark Hurd told reporters on a conference call.
HP forecast fiscal second-quarter earnings per share before items of 83 to 84 cents, above the average Wall Street forecast of 82 cents. HP projected second-quarter revenue ranging from $27.7 billion to $27.9 billion, compared with the average analyst forecast of $27.5 billion.
HP shares, down 14 percent this year, trade at about 13 times expected 2008 earnings per share, a discount to the average of companies on the Standard & Poor's 500 index and about the same as competitor International Business Machines