HP: We're fine for the fourth quarter, 2009

HP: We're fine for the fourth quarter, 2009

Summary: 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).

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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:

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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.

Topics: Enterprise Software, Banking, Hewlett-Packard

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  • HP has the cash and the stamina to turn out the lights ...

    for at least two of their competitors. Sun is headed for the exit, Somebody like Fujitsu might pick up the remnants, but they are otherwise done.

    Dell, they may make a comeback if Michael can learn a new trick, any trick. His former one, ruthlessly squeezing the supply chain, is now being done just as well or better by HP, so he has to do something different. But what will it be?

    IBM is in the best position, their best hope is that HP chokes on the EDS acquisition and gives Global Services the chance to utterly dominate the services market for a long long time.
    terry flores
  • RE: HP: We're fine for the fourth quarter, 2009

    It is HP's desire to have better profitability that is driving their experimentation with products such as Android that do not have Microsoft products in them. If HP can keep Microsoft's cut, they have a competitive advantage...
    tburzio
  • Wonder how their bid to spread x64 computing...

    is working out. I know I like mine, despite ATI performance peccadillos.

    Prices on Vista 64bit machines are phenominal now, and all apps seem to be working well.
    JCitizen
  • RE: HP: We're fine for the fourth quarter, 2009

    This past year, we took a number of actions to increase financial flexibility and help better position HP to compete and win in the marketplace. Although some of those actions were difficult, they worked in 2009 and will continue to help us in 2010. HP has stayed competitive in extremely difficult times and we need to maintain our financial flexibility in the current environment by keeping base pay flat in this year?s Focal Point Review (FPR) cycle, meaning no base pay increases, except where legally required.

    HP post great profits but it's employees are not worthy! Great Company
    hp screwing employees