Hewlett-Packard delivered something as rare as the do-do bird these days: An upside earnings surprise.
HP reassured Wall Street on Tuesday by releasing preliminary fourth quarter earnings and an outlook that was better than expected (statement).
The company said its fourth quarter revenue would be $33.6 billion, compared to Wall Street estimates of $33.1 billion. Earnings will be 84 cents a share or $1.03 excluding charges. Wall Street was expecting earnings of $1 a share excluding charges.
In early trading, HP surged:
There are some signs of stress for HP, however. If you exclude EDS, HP revenue was up 5 percent from a year ago--a slower pace than prior quarters. On constant currency, HP's revenue would be up just 2 percent. And for 2009, HP is expecting revenue to fall below Wall Street estimates.
Nevertheless, HP's performance will be viewed as a win in this economic environment--it's boosting earnings amid slower revenue growth. HP CEO Mark Hurd said in a statement that the company is increasing share in a down market.
HP's outlook for 2009 was close enough to reassure Wall Street. For its fiscal first quarter, HP expects earnings of 80 cents a share to 82 cents a share on revenue of $32 billion to $32.5 billion. Excluding charges, earnings will be between 93 cents a share to 95 cents a share. Wall Street was expecting first quarter earnings of 93 cents a share excluding charges on revenue of $33.7 billion, according to Thomson Reuters.
For fiscal 2009, HP expects earnings of $3.38 a share to $3.53 a share on revenue of $127.5 billion to $130 billion. Excluding charges, HP's earnings will be $3.88 a share to $4.03 a share. Wall Street was expecting earnings of $3.85 a share on revenue of $135 billion.