Hewlett-Packard released preliminary fourth quarter financial numbers and offered a reprise from the gloomy economy that has an impact on other companies, including Sun Microsystems and Intel. HP, the world's largest PC vendor, reported that both its revenue and its earnings beat Wall Street expectations although HP executive plan to offer additional guidance when the full numbers are released Nov. 24.
offered some good news for the technology sector when it released preliminary fourth
quarter numbers that beat Wall Street expectations despite the
sagging economy and financial crisis.
On Nov. 18, HP reported that its revenue for the fourth financial
quarter stood at $33.6 billion, an increase of 19 percent from a year ago. HP
also reported that the company is expecting earnings of 84 cents a share this
quarter or $1.03 per share when those numbers are adjusted. The PC maker saw
earnings of 86 cents a share a year ago.
For 2008, HP is estimating net revenue of $118.4 billion.
Wall Street analysts had been calling for HP to deliver
earnings of $1 per share with revenue of $33.09 billion.
HP is expected to release its full fourth quarter financial
report Nov. 24.
The news from HP is a bit of relief for the IT sector as a
number of top tech companies have released a steady stream of disappointing
news during the past several weeks. One of the biggest letdowns came from Intel,
which warned that its fourth quarter earnings would be below previous expectations.
In addition to Intel, Sun
each announced that they would eliminate employees in order
to cut costs. Dell
which will release its own quarterly report Nov. 20, has asked employees
to take an unpaid vacation to trim costs.
In a statement, HP CEO
Mark Hurd wrote that the company has benefited from sales of PC and other
hardware outside the United States
and a number of other cost-saving measures. Early this year, HP
eliminated more than 20,000 jobs when it bought IT services provider EDS.
"HP delivered another solid quarter as it continues to
benefit from its global reach, diverse customer base, broad portfolio and numerous cost
initiatives," Hurd wrote.
Josh Farina, an analyst with Technology Business Research,
wrote in an e-mail that while HP's hardware businesses will not grow as much this
year, the deal for EDS will help the company
diversify and make up for that lost revenue.
"The acquisition of EDS
further diversifies HP's portfolio and indicates the company's strategy continues
to be successful for HP," Farina wrote. "EDS'
annuity-based business and government presence ensure continued growth for HP,
which I expect will help carry the company through the current economic
In addition to its preliminary fourth quarter report, HP
offered some guidance on the upcoming first quarter of 2009 and the company's
next fiscal year.
For the first quarter of 2009, HP is estimating revenue of
$32 billion to $32.5 billion with earnings ranging from 80 cents to 82 cents a share
or 93 cents to 95 cents a share when the numbers are adjusted. Wall Street
estimates are calling for earnings of 93 cents a share and $33.72 billion in
For the full 2009 fiscal year, HP is estimating revenues of
$127.5 billion to $130 billion with earnings of between $3.38 to $3.53 per
share or $3.88 to $4.03 per share when the numbers are adjusted. Wall Street is
looking for earnings of $3.85 per share with revenue of $135 billion.