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Monday, November 24, 2008
H-P Posts Decline in Earnings, but Sees Rise in Sales
Donna Fuscaldo
FOXBusiness
Computer company Hewlett-Packard (HPQ) posted a decline in fiscal fourth quarter earnings, matching the company’s preannouncement last week. H-P did post a rise in sales.
For its fiscal fourth quarter, Palo Alto, Calif.-based H-P posted net earnings of $2.1 billion, or 84 cents a share, down from $2.16 billion, or 81 cents a share, in the year-ago fiscal fourth quarter. Revenue came in at $33.6 billion, up 19% from last year. Excluding items, H-P reported earnings of $1.03 a share.
Last week H-P surprised Wall Street by positively preannouncing its fiscal fourth quarter earnings. Analysts, according to Thomson Reuters, at that time had expected the company to weigh in with earnings of $1 a share and revenue of $33.09 billion.
During H-P’s fiscal fourth quarter, the company benefited from an increase in notebook computer sales, although printer sales declined. Personal Systems Group revenue, which includes computers, increased 10% with notebook revenue up 21%. Desktop revenue declined 2%. Printer revenue declined 1% while supplies revenue increased 9%.
“H-P capped off a strong year by delivering another solid quarter led by strength in our services segment and disciplined expense management,” said Mark Hurd, H-P chairman and chief executive officer in a press release. “Our global reach, broad portfolio, numerous cost initiatives and consistent execution differentiate H-P in the current economic environment.”
For its fiscal first quarter of 2009, H-P reiterated it expects revenue of $32 billion to $32.5 billion, GAAP diluted earnings in the range of 80 cents to 82 cents a share, and non-GAAP diluted earnings in the range of 93 cents to 95 cents a share.
For the full fiscal year 2009, H-P is targeting revenue of $127.5 billion to $130 billion, GAAP diluted earnings of $3.38 to $3.53, and non-GAAP diluted earnings in the range of $3.88 to $4.03.
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Most folks judge the health of a business by the revenue that comes in through sales. But not all revenue is equal. Companies can grow their sales by buying other companies, which means you don't get a clear view of how the real sales trends are moving.
So, many analysts, particularly those who look at retail, try to gauge what¿s known as "organic" growth, by looking at same-store sales. These are sales only at outlets open more than a year, so the metric can exclude any sales jump that comes from opening new locations. Retailers release same-store sales (which are frequently called "comps" since they're a true comparison from the previous period) every month.
Retail, incidentally, isn't the only industry to look at same-store sales. Hospital companies, also use the metric, to gauge how existing hospitals are performing compared to ones they just built or acquired.
