HP earnings top analyst estimates
Hewlett-Packard Co. edged past Wall Street’s forecast for its fiscal fourth quarter, showing some resilience in troubled times, as strong laptop sales helped offset falling printer orders and weakness in some server lines.
Profit slipped 2% while revenue grew 19%, helped by a huge acquisition. Electronic Data Systems Corp., which HP bought for $13.9 billion, added $3.9 billion in revenue.
The Palo Alto company reported Monday that it sold $6.3 billion worth of laptops, a 21% increase from a year ago, at a time when customers are scaling back spending.
There was significant weakness in other key areas, however. Revenue in two server categories declined and printer sales were off. Ink sales, a big reason the printer division contributes half of HP’s entire operating profit, were a bright spot. Supplies revenue, including ink, rose 9%.
HP had announced preliminary results last week to reassure investors and shore up a sinking stock price. The full results were released Monday after the markets closed.
Net income was $2.11 billion, or 84 cents a share, in the quarter that ended Oct. 31, compared with $2.16 billion, or 81 cents, a year earlier. Excluding one-time costs, HP’s profit was $1.03 a share, 2 cents higher than the average estimate of analysts polled by Thomson Reuters.
Sales were $33.6 billion, a 19% increase over last year’s $28.3 billion. Excluding the effects of a weak dollar, revenue rose 16%. Analysts were expecting $33.3 billion.
HP repeated its earlier forecast for the current fiscal year, which includes a warning that further strengthening of the dollar is expected to hurt sales. Deals done in other currencies translate into fewer greenbacks when those currencies fall in value compared with the dollar.
In its fiscal first quarter, HP expects profit of 93 cents to 95 cents a share, excluding one-time charges, on sales of $32 billion to $32.5 billion. For the full 2009 fiscal year, HP expects profit of $3.88 to $4.03 a share, excluding one-time items. Sales are projected to be $127.5 billion to $130 billion.
HP’s stock fell 31 cents to $35.39 in after-hours trading. It had closed up $1.06 at $35.70.
