HP 3Q profit jumps 14 pct

August 19, 2008 10:11:39 PM PDT
Hewlett-Packard Co.'s fiscal third-quarter profit jumped 14 percent, beating Wall Street's expectations, as strong laptop sales and a robust international presence continued to lift the technology bellwether.

The Palo Alto, Calif.-based company's results, reported after the market closed Tuesday, signaled that HP continues to hold its ground as the world's No. 1 seller of personal computers even with stronger competition from Dell Inc. and Apple Inc. and aggressive price cuts.

But some investors have expressed fears that HP's growth might taper off as it digests its $13.9 billion acquisition of Electronic Data Systems Corp. The deal deepens HP's battle with IBM Corp. for the dollars that corporate customers spend to get guidance on setting up their computer networks.

Investors have become accustomed to HP offering conservative guidance and topping those forecasts by a few pennies per share, so HP's strong results for the May-July period and a fourth-quarter outlook that was slightly better than analysts expected weren't much of a surprise.

Still, HP's optimism about its prospects despite a tough economic environment in the U.S. and parts of Europe helped lift the stock.

HP shares rose $1.31, or 3 percent, to $45 in after-hours trading after the results were reported. The stock had fallen 91 cents, or 2 percent, to $43.69 during the regular trading session. HP said it earned $2.03 billion, or 80 cents per share, in the latest period, up from $1.78 billion, or 66 cents per share, a year earlier.

Excluding one-time charges, HP's profit was 86 cents per share, three cents higher than the average estimate of analysts polled by Thomson Reuters.

Sales were $28.0 billion, a 10 percent increase over last year and higher than the $27.4 billion analysts were expecting.

In the current fiscal fourth quarter, HP said it expects a profit between $1.01 and $1.03 per share, ahead of the $1 that analysts had been forecasting. HP also forecast revenue between $30.2 billion and $30.3 billion in the fourth quarter. Analysts had been expecting $30.2 billion.


Load Comments