Hewlett-Packard (HPQ-NYSE) posted $0.70 EPS versus $0.68 EPS estimates and posted Revenues of $25.5 billion.  Since the company had already raised guidance, alll that matters here is the forward guidance and the details in the numbers.  Next quarter’s guidance is for EPS in the $0.63 to $0.65 range versus $0.64 estimates.  It also forecast fiscal 2007 revenues of $100.5 to $100.9 billion versus street estimates of $100.65 Billion and forecast EPS at $2.75 to $2.77 compared to estimates of $2.73. 

Looking beyond printing and imaging, the numbers are all showing growth: Enterp[rise Storage & Servers up 8%, HP Services up 7%, Software grew 58% (because of Mercury Interactive acquisition), Financial Services grew 6%.  If you include personal systems and imaging these grew also: personal systems grew 24% and unit shipments grew 30%, and imaging and printing grew 6%.

During the quarter, on a year-over-year basis, revenue in the Americas grew 11% to $10.7 billion, revenue in Europe, the Middle East and Africa grew 14% to $10.3 billion, and revenue in Asia Pacific grew 16% to $4.5 billion. When adjusted for the effects of currency, revenue in the Americas grew 11%, revenue in Europe, the Middle East and Africa grew 7%, and revenue in Asia Pacific grew 13%.

Shares are being rewarded in after-hours because of a belief that CEO Mark Hurd is conservative in earnings guidance.  Shares are currently up 0.5% to $45.40, and the old 52-week high before today was $45.35.

Its forward P/E ratio is now 16.5 and its forward revenue multiple is 1.2.  Investors can always question their ability to ramp and grow like they managed in the last two years when its stock doubled, but calling this an expensive stock now based upon its multiples is just hard to say.

Jon C. Ogg
May 16, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.

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