HP's Profits Soar Amid Fierce Competition - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Business & Finance

HP's Profits Soar Amid Fierce Competition

Net earnings for the quarter ended April 30 were up 34% to $884 million, but Wall Street is still wary about the company''s future performance.

SAN JOSE, Calif. (AP) -- Hewlett-Packard Co.'s quarterly earnings jumped 34 percent and matched Wall Street expectations Tuesday, but analysts remained cautious about the computer maker's long-term outlook amid fierce competition from rivals.

For the three months ended April 30, HP reported a profit of $884 million, or 29 cents per share, compared with $659 million, or 22 cents per share, in the same period last year.

Excluding special items, HP earned $1.03 billion, or 34 cents per share. That compared with $877 million, or 29 cents per share, in the same period a year earlier.

Analysts expected the company to earn 34 cents per share, according to a survey by Thomson First Call.

Second-quarter 2004 revenue was a record $20.1 billion, up 12 percent from $18 billion in the second quarter of 2003.

Carly Fiorina, HP's chairman and chief executive, characterized the second quarter as "strong," crediting record sales of personal computers, computer hardware to corporate customers, and the Palo Alto, Calif.-based company's continued dominance in printers, ink, and other imaging products.

"These results demonstrate that we are winning and growing across the portfolio in an intensely competitive market," Fiorina said.

Although revenue growth in personal computers has outstripped that of rival Dell Inc. in recent quarters, Wall Street veterans sounded notes of caution about HP's earnings report. Most analysts polled by Thomson First Call rated HP stock a "hold," and share performance lagged that of HP's fiercest rivals, Dell and IBM Corp.

"Locked in a seemingly endless struggle with Dell, HP apparently cannot match their competitors' flexibility ... and capacity to ride component pricing trends," technology analyst Mark D. Stahlman, managing director of Caris & Co., wrote in a report this week. "At the same time, Dell's commitment to squeeze HP's bedrock printer franchise is also likely to be a concern."

HP's price-to-earnings ratio, a critical measure of Wall Street's long-term enthusiasm for a company, is about 22 times estimated earnings--about the same as the ratio for the S&P 500 Index. But it trails the ratios of many tech bellwethers: Dell's ratio is 32, and Microsoft Corp.'s is 30. IBM's is 19, while eBay Inc.--one of the highest performing tech stocks since the collapse of the stock market in spring 2000, has a ratio of 96.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Comment  | 
Print  | 
More Insights
State of the Cloud
State of the Cloud
Cloud has drastically changed how IT organizations consume and deploy services in the digital age. This research report will delve into public, private and hybrid cloud adoption trends, with a special focus on infrastructure as a service and its role in the enterprise. Find out the challenges organizations are experiencing, and the technologies and strategies they are using to manage and mitigate those challenges today.
Commentary
Future IT Teams Will Include More Non-Traditional Members
Lisa Morgan, Freelance Writer,  4/1/2020
News
COVID-19: Using Data to Map Infections, Hospital Beds, and More
Jessica Davis, Senior Editor, Enterprise Apps,  3/25/2020
Commentary
Enterprise Guide to Robotic Process Automation
Cathleen Gagne, Managing Editor, InformationWeek,  3/23/2020
Register for InformationWeek Newsletters
Video
Current Issue
IT Careers: Tech Drives Constant Change
Advances in information technology and management concepts mean that IT professionals must update their skill sets, even their career goals on an almost yearly basis. In this IT Trend Report, experts share advice on how IT pros can keep up with this every-changing job market. Read it today!
White Papers
Slideshows
Twitter Feed
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Sponsored Video
Flash Poll