Wednesday 20 August 2008

Hewlett-Packard 3Q profit jumps 14 pct

SAN FRANCISCO - Hewlett-Packard Co।'s fiscal third-quarter profit jumped 14 percent, beating Wall Street's expectations, as strong laptop sales and a robust international presence lifted the technology bellwether.
The Palo Alto-based company's results, reported after the market closed Tuesday, signaled that HP is still holding its ground as the world's No. 1 seller of personal computers even with stronger competition from Dell Inc. and Apple Inc. and aggressive price cuts.
HP said it earned $2.03 billion, or 80 cents per share, in the latest period, up from $1.78 billion, or 66 cents per share, a year earlier.
Excluding one-time charges, HP's profit was 86 cents per share, three cents higher than the average estimate of analysts polled by Thomson Reuters.
Investors have become accustomed to HP offering conservative guidance and topping those forecasts by a few pennies per share, so HP's strong results for the May-July period and a fourth-quarter outlook that was slightly better than analysts expected weren't much of a surprise.
Still, HP's optimism about its prospects despite a tough economic environment in the U.S. and parts of Europe helped lift the stock.
HP shares rose $1.25, or 2.9 percent, to $44.94 in after-hours trading after the results were reported. The stock had fallen 91 cents, or 2 percent, to $43.69 during the regular trading session.
HP's profits were hurt by higher prices for some of its parts and a shift toward cheaper PCs, but stronger sales of technology services and software helped offset those pressures.
The company's gross profit margin — its profit on each dollar of revenue once manufacturing costs are stripped out — was 24.2 percent of revenues, down slightly from the year-ago period.
HP also is still benefiting from weakness in the dollar. Deals HP does in other currencies translate into more dollars as the U.S. currency falls.
Sales were $28.0 billion, a 10 percent increase over last year and higher than the $27.4 billion analysts were expecting.
That revenue rise would have been just 5 percent, however, when adjusted for currency fluctuations.
Sales of laptop computers rose 26 percent to $5.35 billion.
Some investors have expressed fears that HP's growth might taper off as it digests its $13.9 billion acquisition of Electronic Data Systems Corp. The deal deepens HP's battle with IBM Corp. for the dollars that corporate customers spend to get guidance on setting up their computer networks.
Also a point of concern for some analysts was sales growth of just 3 percent in HP's printer and ink division, which provides more than a third of HP's total profits. Printer sales fell, but HP boosted the sale of supplies — which includes the expensive and profitable ink — by 11 percent.
In the current fiscal fourth quarter, HP said it expects a profit between $1।01 and $1.03 per share, ahead of the $1 that analysts had been forecasting. HP also forecast revenue between $30.2 billion and $30.3 billion in the fourth quarter. Analysts had been expecting $30.2 billion.
Reference : http://news.yahoo.com/s/ap/20080819/ap_on_hi_te/earns_hewlett_packard

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Nasser Hajloo
a Persian Graphic Designer , Web Designer and Web Developer
n.hajloo@gmail.com

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