Hewlett-Packard Co delivered a fiscal first-quarter profit above analyst expectations and brightened its outlook for the rest of the year, providing a ray of high-tech hope amid the gathering economic gloom.
The encouraging news drove up HP's stock price by 5 percent late on Tuesday.
The Palo Alto-based maker of computers and printers said it earned US$2.13 billion, or US$80 per share, for the three months ended last month, a 38 percent increase from net income of US$1.55 billion, or US$55 per share, in the same period a year earlier.
If not for expenses stemming from past acquisitions, HP said it would have earned US$86 per share. That figure exceeded the average estimate of US$81 per share among analysts surveyed by Thomson Financial.
Revenue for the period totaled US$28.5 billion, a 13 percent increase from the previous year. Analysts, on average, had forecast revenue of US$27.6 billion.
More than two-thirds of HP's revenue came in markets outside the US, where the weak dollar has become into a sales catalyst.
If not for favorable currency fluctuations, HP said its first-quarter revenue would have been up by a more modest 8 percent.
Management predicted HP will fare better than analysts had been anticipating for the remainder of its fiscal year. Excluding certain one-time expenses, HP expects to earn from US$3.50 to US$3.54 per share for the year ending in October, outstripping the previous analyst estimate of US$3.36 per share, Thomson Financial said.
HP, the world's largest technology company by revenue, has been consistently boosting its earnings guidance since Mark Hurd took over chief executive nearly three years ago. This marked the 10th consecutive quarter in which Hurd raised the bar for the company's future performance.
"Going forward, I am confident in our ability to deliver stronger results," Hurd told analysts during a conference call on Tuesday.
Hurd said that his optimism had more to do with his faith in HP's own strategy and strength in international markets than in the ability of the US economy to avoid a recession.
To ensure HP hits its earnings targets, Hurd pledged to wring out even more expenses after several years of cost cutting that included thousands of buyouts and layoffs.
Escalating worries about the weakening economy have been punishing high-tech stocks in recent weeks as industry bellwethers like Google Inc, Apple Inc, Intel Corp and Cisco Systems Inc either released disappointing quarterly profits or tepid forecasts.
HP joined fellow high-tech heavyweights Microsoft Corp and IBM Corp in producing quarterly earnings and forecasts that painted a somewhat rosier picture.
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