HP: Outlook on target; solid results throughout

Hewlett-Packard reported better than expected fourth quarter results Monday and delivered a solid outlook for its upcoming quarter.

HP said its fourth quarter earnings were $2.16 billion, or 81 cents a share, on revenue of $28.3 billion. Excluding charges, earnings were 86 cents a share. Fourth quarter revenue was up 15 percent from a year ago and net income was up 28 percent from a year ago.

According to Thomson Financial, HP (preview, statement, all resources) was expected to report earnings of 82 cents a share on revenue of $27.4 billion. For fiscal 2007, HP reported earnings of $7.3 billion, or $2.68 a share, on revenue of $104.3 billion.

While the results were impressive, most folks wanted to hear about the outlook. HP projected first quarter revenue between $27.4 billion and $27.5 billion with earnings to be about 80 cents a share excluding charges. Including charges, HP projected earnings of 75 cents a share. For fiscal 2008, HP sees revenue of about $111.5 billion with earnings between $3.12 a share to $3.17 a share. Excluding charges, the annual earnings range is expected to be $3.32 a share and $3.37 a share.

Those projections topped estimates. For HP’s fiscal first quarter the company was expected to report earnings of 77 cents a share on sales of $27 billion. For fiscal 2008, HP is expected to report earnings of $3.27 a share on sales of $109.5 billion.

By the numbers:

• HP's personal systems group revenue was up 30 percent from a year ago to $10.1 billion. Unit shipments were up 31 percent from a year ago. Notebook revenue was up 49 percent from a year ago with desktops up 15 percent. Consumer sales jumped 40 percent and commercial revenue was up 24 percent. Operating profit: $589 million.
• The imaging and printing group revenue was $7.6 billion, up 4 percent from a year ago. Supplies revenue (mostly ink) was up 6 percent. Consumer hardware revenue fell 5 percent from a year ago. Operating profit: $1.1 billion, flat with a year ago.
• Enterprise storage and servers had revenue of $5.2 billion, up 10 percent from a year ago. HP showed the most momentum in x86 blade servers with revenue growth of 78 percent. Storage revenue was up 7 percent. Operating profit: $693 million.
• Services revenue was up 7 percent from a year ago to $4.4 billion. Operating profit: $526 million.
• Software revenue doubled to $698 million, led by the Mercury Interactive business. Operating profit: $177 million.