H-P Keeps Exceeding Targets (HPQ, DELL)

Hewlett-Packard (NYSE: HPQ) posted non-GAAP EPS of $0.86 on $28.47 Billion in revenues.  First Call had estimates pegged at $0.81 EPS on $27.6 Billion.  H-P also put next quarter at $0.83 to $0.84 EPS versus $0.82 estimates, and it put revenues in a range of $27.7 to $27.9 Billion.  HP sees Fiscal-2008 revenue will be approximately $113.5 to $114.0 Billion, and it sees non-GAAP diluted EPS is expected to be in the range of $3.50 to $3.54.  First Call has estimates at $111.7 Billion and $3.36 non-GAAP EPS.

All units appear to have fired well:

• Americas revenue grew 8% on a year-over-year basis to $11.2 Billion, revenue grew 15% in EMEA to $12.3 Billion, and revenue grew 22% in Asia Pacific to $4.9 Billion.
• Personal Systems revenue grew 24% year over year to $10.8 billion; unit shipments up 27%.
• Imaging & Printing revenue grew 4% year over year to $7.3 Billion.
• Enterprise Storage & Servers rose 9% to revenue of $4.8 Billion.
• HP Service revenues increased 11% to $4.4 Billion.
• HP Software revenue grew 11% to $666 million.
• HP Financial Services revenue rose 17% to $642 million.
• HP generated some $3.2 Billion in cash flows from operations for the quarter, and its inventor of $7.9 Billion was down 6-days from last year.
• HP used roughly $3.3 billion of cash in the quarter to repurchase roughly 72 million shares of common stock in the open market.

We had noted how the chart was likely to play in today.  H-P’s 50-daymoving average is $46.71 and the even more rigid 200-day moving is$47.70.  Shares are up $2.05 in immediate after-hours trading to $46.00.  H-P shares are up almost 6% at $46.50 in after-hours trading, so pay attention to those key moving averages.  Dell Inc. (NASDAQ: DELL) shares are up as well, although only about 1.4% in after-hours trading.

Jon C. Ogg
February 19, 2008