Hewlett Packard Offers Optimistic Outlook to Wall Street

November 19, 2008

(ChattahBox) — The fourth quarter outlook from Hewlett Packard looks optimistic as compared to Wall Street’s expectations. Technology giants have posted weak results in the past few weeks and have slashed their forecasts. HP’s strong outlook comes as a pleasant surprise to the Wall Street stalwarts. It forecasts revenue of $33.6 million as compared to the expected revenue of $33.09 million. The $13.9 billion acquisition of Electronic Data Systems Corp. by HP also boosted its quarterly revenues.

HP shares jumped $4.25 or 14.5 percent to close at $33.59 on Tuesday. It expects earnings of 84 cents per share and adjusted earnings of $1.03 per share of three months ended in October 2008.

The projections show that the cost cuts by the HP Chief Executive Mark Hurd have helped the company to generate more profits from its sales. “It’s a validation of the fact that HP is generally extremely well-positioned in a tougher economic environment versus its peers,” said Toni Sacconaghi, the top-ranked computer analyst by Institutional Investor magazine and an analyst at the Stanford C Bernstein in New York.

The company is benefits from its diversified portfolio and global reach of its products that helps it to gain maximised customer base. However, it warns that strengthening of dollar may wipe out 6-7 percentage points from its revenue next year. The company also stated that revenues for the next year are likely to reach $127.5 billion to $130 billion which are below the Wall Street expectations of $135 billion. It attributes the drop in its forecasts to the strengthening dollar and pressure in demand from the retail market.


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