HP delivered strong first quarter earnings Wednesday and raised its outlook for 2010 in a move that signals that the company is set to gain amid PC and server upgrade cycles.
The company reported first quarter net income of $2.3 billion, or 96 cents a share, on revenue of $31.2 billion, up 8 percent from the year ago quarter. Non-GAAP earnings were $2.7 billion, or $1.10 a share.
Wall Street was expecting earnings of $1.06 a share on revenue of $30.01 billion.
Meanwhile, HP raised its outlook for fiscal 2010 and the second quarter (statement, preview).
For the second quarter, HP is projecting revenue between $29.4 billion and $29.7 billion. Earnings will be 89 cents a share to 91 cents a share under generally accepted accounting principles (GAAP). Non-GAAP earnings are expected to be $1.03 to $1.05 a share. Wall Street was looking for earnings of $1.03 a share on revenue of $29.03 billion, according to Thomson Reuters.
HP's outlook for fiscal 2010 was also better than expected. The company projected revenue of $121.5 billion to $122.5 billion, up from its previous estimate of $118 billion to $119 billion. GAAP earnings will be $3.79 to $3.86 a share with non-GAAP earnings of $4.37 to $4.44 a share. Wall Street was looking for earnings of $4.37 a share on revenue of $120.3 billion.
In a call with analysts today, company CEO Mark Hurd called HP's portfolio one of the best and broadest in the industry, noting that the company is No. 1 or No. 2 in every category where it competes. He said the investment to ensure innovation in technology will continue, noting that the customers put value in innovation, scale, usability and affordability, among other things. He said HP's market coverage in IT is strong and that cost initiatives are paying off, noting a double-digit growth in revenue-per-employee.
Hurd made a point of saying that HP's best days lie ahead. It's a far cry from what companies were saying not so long ago as uncertainty around the economy had execs guessing. Pair that comment with the boost in earnings forecasts and it feels safer to say that the worst of the economy is in the past.
From today's call with analysts.
By the numbers:
A few quick notes on the results: