H-P beats 4th-quarter earnings mark

/ Source: The Associated Press

Hewlett-Packard Co.’s fourth-quarter earnings inched past Wall Street estimates Tuesday as the computer giant reported strong sales in its traditional printing market and growth in technology services for corporate customers.

For the three months ended Oct. 31, Palo Alto-based H-P earned $862 million, or 28 cents per share, compared with $390 million or 13 cents per share, in the same period last year.

Excluding special items, H-P earned $1.1 billion, or 36 cents per share. That compares with $721 million, or 24 cents per share, in the same period of 2002.

Fourth-quarter revenue was $19.85 billion, up 10 percent from $18.05 billion in the fourth quarter of 2002.

Analysts were expecting H-P to earn 35 cents per share cents per share on revenue of $19 billion, according to a survey by Thomson First Call.

“H-P’s excellent fourth quarter performance capped a fiscal year in which we delivered on our commitments,” said Carly Fiorina, H-P’s chairman and chief executive. “We achieved profitability in each of our businesses. We grew revenue and market share. We exceeded our integration and cost saving goals ahead of schedule.”

Analysts said H-P’s outlook could get another boost next quarter, when holiday sales are expected to outpace last year’s Grinch-like season and many technology companies complete 2004 budgets.

H-P improved its outlook for the first quarter of the 2004 fiscal year, telling analysts it will likely generate revenue of at least $19.1 billion. Previously, the company told analysts to expect $19 billion.

H-P introduced more than 100 new products this summer, including highly rated digital photography and desktop products aimed at consumers. It launched a line of high-volume copiers Tuesday to compete against Xerox Corp., Canon Inc. and Ricoh Co.

But some Wall Street veterans sounded notes of caution this week about H-P’s future.

“We think H-P’s long-term fundamentals are still plagued by structural issues,” Ali Irani of CIBC World Markets Corp. wrote in a research report, citing H-P’s “erratic” supply chain and its “over-reliance” on low-margin printers and ink. “With the company squeezed between the successful models of IBM and DELL, H-P is still seen as a market share target.”