“With a stellar start to its new fiscal year, Hewlett-Packard Co. has given technology investors something else to get excited about besides Microsoft Corp.’s audacious bid to buy Yahoo Inc.,” The Associated Press reports. “Now Wall Street will try to figure out whether the success of the world’s largest technology company bodes well for the rest of the industry as the U.S. economy sputters toward a possible recession.”
“Boosted by rising computer sales, HP demonstrated its strength amid the economic weakness with a 38 percent increase in its fiscal first-quarter profit and a pledge to deliver even better results during the rest of the year,” AP reports.
“The news late Tuesday drove HP shares up $2.17, or nearly 5 percent, in extended trading after the stock finished the regular session up 8 cents at $43.95,” AP reports.
“The Palo Alto-based maker of computers and printers said it earned $2.13 billion, or 80 cents per share, for the three months ended in January. That compared with net income of $1.55 billion, or 55 cents per share, in the same period a year earlier… Revenue for the period totaled $28.5 billion, a 13 percent increase from the previous year. Analysts, on average, had forecast revenue of $27.6 billion,” AP reports.
MacDailyNews Note: Last quarter, Apple earned net income of $1.58 billion on revenue of $9.6 billion.
“HP’s management predicted the company will fare better than analysts had been anticipating for the remainder of its fiscal year. Excluding certain one-time expenses, HP expects to earn from $3.50 to $3.54 per share for the year ending in October, outstripping the previous analyst estimate of $3.36 per share, according to Thomson Financial,” AP reports.
MacDailyNews Take: Analysts surveyed by Thomson Financial were looking for Apple to provide Q2 08 revenue guidance of $6.99 billion and earnings per share of $1.09. Instead, Apple guided “about $6.8 billion and earnings per diluted share of about $0.94” in their usual notoriously conservative fashion. Supposedly this is why AAPL was hammered to the tune of nearly $70 billion since that guidance was provided. Overreact much, Mr. Wall Street?
“‘This is good news for tech,’ said Gartner Inc. analyst Martin Reynolds. ‘If we can just get through another quarter, maybe the (technology) industry will skate through all of this nastiness without suffering too much damage,'” AP reports.
“American Technology Research analyst Shaw Wu cautioned against using HP to gauge the financial temperature of the entire tech industry. He said he thinks HP’s performance is being driven largely by its extensive reach beyond the troubled United States market and a no-nonsense approach that has permeated the company since Mark Hurd became chief executive nearly three years ago,” AP reports.
Full article here.