Hewlett-Packard 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 Microsystems and Advanced Micro Devices 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 downturn."
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 revenue.
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.