HP Beats the Street
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Hewlett-Packard (NYSE: HPQ) posted better than expected results and guidance after the close on Tuesday, fresh evidence that IT spending continues to defy the year-long economic downturn.
HP reported non-GAAP earnings of 86 cents a share, 3 cents better than Wall Street analysts expected. The company's sales rose a better than expected 10% to $28 billion, and the company's current quarter guidance of $1.01-$1.03 per share earnings on $30.2-$30.3 billion in revenues was also a little above forecasts.
Not surprisingly, much of the growth came from outside the U.S., thanks to currency benefits and a stronger global economy, with Europe, the Middle East and Africa (EMEA) and Asia Pacific revenues up 16% and 14%, respectively. U.S. revenues, meanwhile, grew 4%.
68% of HP's sales now come from outside the U.S. Revenue in the fast-growing "BRIC" countries (Brazil, Russia, India and China) grew 24% and accounted for 10% of total revenues.
Notebook sales rose 26% and desktop revenues 6% as Personal Systems revenues hit $10.3 billion. Imaging and printing revenues grew 3% to $7 billion, and enterprise server and storage sales were up 5% to $4.7 billion. Software sales were up 29% to $781 million.
Services revenues grew 14% to $4.8 billion and will become an even bigger part of the company's business when its acquisition of EDS (NYSE: EDS) closes this quarter.
HP sales rose 3% in after-hours trading, but in a market obsessed about the health of financial companies and inflation pressures, HP's results may do little for the rest of the stock market, which fell sharply again Tuesday on financial worries, rising wholesale inflation and falling home starts and building permits.
Nvidia (NASDAQ: NVDA) once again bucked the downtrend with a 1.5% gain, as it continued to rally in the wake of better than expected results.
AMD (NYSE: AMD) lost 5.6% ahead of Intel's (NASDAQ: INTC) Developer Forum.
China TechFaith (NASDAQ: CNTF) plunged 26% on a revenue warning.
The Nasdaq fell 32 to 2384, the S&P lost 12 to 1266, and the Dow tumbled 130 to 11,348. Volume rose to 4.16 billion shares on the NYSE, and 1.78 billion on the Nasdaq. Decliners led by a 24-9 margin on the NYSE, and 20-7 on the Nasdaq. Downside volume was 75% on the NYSE, and 80% on the Nasdaq. New highs-new lows were 14-176 on the NYSE, and 29-110 on the Nasdaq.