HP shares rise as profit beats Street targets
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SAN FRANCISCO (Reuters) - Hewlett-Packard Co on Tuesday reported higher-than-expected quarterly earnings and forecast results ahead of Wall Street targets as it sold more PCs and server computers, sending its shares up 6 percent.Analysts noted some weakness in the printer division but said the report showed HP was able to manage through a tough economy.Net income in HP's fiscal first quarter ended January 31 increased to $2.13 billion, or 80 cents per share, from $1.55 billion, or 55 cents per share, a year earlier. Revenue advanced to $28.5 billion from $25.1 billion.Excluding special items, profit was 86 cents per share. Analysts, on average, expected earnings before some costs of 81 cents per share and revenue of $27.6 billion, according to Reuters Estimates."This positions the company well for 2008 and shows that they are able to execute even in a slowing economy." said analyst Shannon Cross of Cross Research."They needed to do this (have a strong earnings report). They still had a slowdown from the printer side but the other parts of the business made up for it."HP was helped by cost cuts and strong sales outside the United States as U.S. technology spending slowed on recession concerns. But HP faces a tougher environment this year as consumers and companies reduce spending on technology hardware, the bulk of HP's business, and competition with a resurgent Dell Inc , the number-two PC maker, heats up."Our cost savings are significant and ongoing," Chief Executive Mark Hurd told reporters on a conference call.HP forecast fiscal second-quarter earnings per share before items of 83 to 84 cents, above the average Wall Street forecast of 82 cents. HP projected second-quarter revenue ranging from $27.7 billion to $27.9 billion, compared with the average analyst forecast of $27.5 billion.HP shares rose 6.2 percent in extended trading after closing up 8 cents at $43.95 on the New York Stock Exchange.(Reporting by Philipp Gollner; Editing by Braden Reddall)
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