Hewlett-Packard (NYSE: HPQ) is scheduled to release fiscal second-quarter earnings after the market close on Wednesday, May 19, 2010. Analysts, on average, expect the company to report earnings of $1.05 per share on revenue of $29.82 billion. In the year-ago period, the company reported earnings of 86 cents per share on revenue of $27.35 billion.
Hewlett-Packard Company offers various products, technologies, software, solutions, and services worldwide. The company's Services segment provides consulting, outsourcing, and technology services to infrastructure, applications, and business process domains.
In the preceding fiscal-first quarter, the Palo Alto, California-based company reported that its net income was $2.3 billion or $0.96 per share, compared to $1.9 billion or $0.75 per share for the year-ago quarter. Excluding items, non-GAAP net income for the first quarter was $2.7 billion or $1.10 per share, compared to $2.3 billion or $0.93 per share in the prior year quarter. Revenue grew 8% to $31.18 billion from $28.81 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of $1.06 per share on revenue of $30.01 billion.
For the second quarter, HP expects revenue of $29.4 billion to $29.7 billion, GAAP earnings of $0.89 to $0.91 per share and non-GAAP earnings of $1.03 to $1.05 per share.
For the fiscal year 2010, the company anticipates revenue of $121.5 billion to $122.5 billion, GAAP earnings of $3.79 to $3.86 per share and non-GAAP earnings of $4.37 to $4.44 per share. Analysts currently expect the company to earn $4.37 per share on revenue of $120.03 billion for the fiscal year 2010.
Hewlett Packard has benefited from improving trends in PCs, servers, and printing. PC sales particularly got a boost from stronger consumer demand, especially during the holiday season and following the rollout of Windows 7, Microsoft Corp.'s new operating system. Worldwide PC shipments during the first three months rose 27.4% from a year ago to 84.3 million units, according to preliminary results by market research firm Gartner, Inc. Gartner had been expecting first quarter PC shipments to grow 22%. Hewlett-Packard Co. continued to be the world's top PC vendor, with 15.3 million unit shipments, up 19.9% from a year earlier, Gartner said.
Late in April, Hewlett-Packard agreed to buy smart phone maker Palm for about $1.2 billion in cash. The transaction is expected to close during HP's third fiscal quarter ending July 31, 2010. The proposed merger would transform H-P, already the world's top seller of personal computers, into a leading competitor in the rapidly growing smartphone market -- an area pioneered by Palm. Commenting on the deal, Todd Bradley, executive vice president, Personal Systems Group, HP said, "Palm's innovative operating system provides an ideal platform to expand HP's mobility strategy and create a unique HP experience spanning multiple mobile connected devices."
Hewlett-Packard presented a Windows-powered tablet called Slate at CES in January. Many analysts now believe HP will now design a tablet using Palm's software. H-P is also understood to be in discussions with Google about incorporating Google's Android operating system into a slate or tablet-style computer later this year. Although tablets are projected to make up only 1 percent of computer sales this year, that could rise to nearly 25 percent by 2015, according to Coda Research Consultancy.
In terms of stock performance, H-P shares have rallied nearly 36% over the past year.
Disclosure: Author doesn’t own any of the stocks discussed here.
