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Earnings Analysis: 
HP Earnings Jump
Author: George Shopov
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Computer and printer giant Hewlett-Packard Company posted after the bell Tuesday quarterly earnings that advanced 26.5% from last year, driven by record sales across all of its divisions.

 
Hewlett-Packard Company (HPQ: chart) posted after the bell Tuesday net income of $1.09 billion, or 37 cents per share, for its fiscal 2004 fourth quarter. That represents a 26.5% rise compared to net income of $862 million, or 28 cents per share, for the prior-year equivalent. The computer company said record quarterly revenue across all of its segments drove the results. Excluding items, HP turned in a profit of $1.2 billion, or 41 cents per share, for the quarter ended October 31, up from $1.1 billion, or 36 cents per share, a year earlier. The average analysts’ estimate was for earnings before items of 37 cents per share. The Palo Alto, California-based company reported that its fourth-quarter revenue climbed 8% to $21.39 billion from $19.85 billion, in 2003. The Technology Solutions Group, which comprises Enterprise Storage and Servers, Software and HP Services, delivered revenue of $8.0 billion in the quarter, a 10% growth year-over-year. HP’s Personal Systems unit increased revenues by 9% to a record $6.5 billion. Revenues at the Imaging and Printing division rose 5% from last year to $6.5 billion.

HP shares closed Tuesday at $19.68, up 26 cents, or 1.34%. The stock soared 8.49% to $21.35 in the extended session.

Wal-Mart Stores, Inc. (WMT: chart) reported before market open Tuesday record quarterly results, boosted by strength in its international operations and higher same-store sales at its Sam's Club warehouse stores. The Bentonville, Arkansas-based world’s biggest retailer said it had income from continuing operations of $2.29 billion, or 54 cents a share, in the third quarter of fiscal 2005, which represents a 12.7% rise, compared with year-earlier income of $2.03 billion, or 46 cents a share. The results met the average analysts’ forecast. For the quarter ended October 31, the company reported net sales of $68.5 billion, up 9.7% from $62.48 billion, a year ago. The company’s international division delivered an 18% growth in sales of $13.55 billion. Sales in the Wal-Mart division climbed 8.3% and Sam's Club sales improved 5.5%. Comparable-store sales at Wal-Mart's U.S. divisions inched up 1.7%, while at Sam's Club they edged up 4.0%.

The stock slipped 1.40% to $56.89 at market close Tuesday. Company shares inched down 4 cents to $56.85 in after-market trade.

The Home Depot, Inc. (HD: chart) of Atlanta, Georgia, said Tuesday that its quarterly profits improved 15% from a year ago, boosted by higher sales. The world’s No.1 home improvement chain announced earnings of $1.31 billion, or 60 cents a share, for its third quarter, against earnings of $1.14 billion, or 50 cents a share, last year. The results were 3 cents a share ahead of the mean analysts’ forecast. Sales in the quarter advanced 13% to $18.8 billion, with same-store sales climbing 4.5% from a year ago.

Company shares dipped 1.80% on Tuesday to $43.00. The stock gained 16 cents to $43.16 in extended-hours trading.

Borders Group, Inc. (BGP: chart) announced Tuesday that it swung to a loss of $1.5 million, or 2 cents per share, in its fiscal third quarter, from a prior-year profit of $500,000, or 1 cent per share, citing sluggish store traffic and weaker demand for bestseller titles. The Ann Arbor, Michigan-based bookstore operator had a loss, excluding items, of a penny a share. Analysts had predicted a third-quarter loss of 2 cents a share. Quarterly revenue inched up 2.6% to $838.6 million.

The stock rose 1.53% to close Tuesday at $23.21. Company shares added 9 cents to $23.30 in after-market trade.

J. C. Penney Company, Inc. (JCP: chart) of Plano, Texas, on Tuesday rolled out a huge rise in its quarterly earnings, driven by higher sales and fewer markdowns. The department store operator said it earned $149 million, or 50 cents a share, in its third quarter, an 86% surge from $80 million, or 27 cents a share, generated in the same period of the previous year. The earnings topped by a penny a share Wall Street’s consensus estimate.

Company shares closed Tuesday down 43 cents, or 1.06%, at $39.98.

Network Appliance, Inc. (NTAP: chart) on Tuesday turned in second-quarter net income of $55.3 million, or 15 cents a share, up 14% from net income of $48.4 million, or 13 cents a share, for the 2004 comparable period. Excluding items, the Sunnyvale, California-based developer of data storage equipment posted a profit of 16 cents a share, surpassing by 2 cents analysts’ expectations. The company attributed the results to strong demand for its products. Revenue in the quarter surged to $375.2 million from $275.6 million.

The stock shed 44 cents on Tuesday to $25.02. Company shares jumped 10.35% to $27.61 in after-hours trading.

Nordstrom, Inc. (JWN: chart) of Seattle, Washington, posted Tuesday quarterly profits that beat Wall Street’s expectations, aided by strong same-store sales, reduced tax rate and lower costs. The retailer announced third-quarter net earnings of $77.8 million, or 54 cents per share, in contrast to earnings of $45.5 million, or 33 cents per share, for the year-ago quarter. Analysts were looking for a profit of 46 cents per share. Quarterly sales climbed 9.4% to $1.54 billion. Comparable-store sales increased 8.1% from last year.

Nordstrom shares slid 2.61% to $44.80 at market close Tuesday. The stock gained $1.20 to $46.00 in extended trade.

Staples, Inc. (SPLS: chart) reported Tuesday that its third-quarter income jumped 26% to $208.9 million, or 41 cents per share, from year-earlier income of $165.8 million, or 33 cents per share, on robust sales. The Framingham, Massachusetts-based office supplies retailer beat by a penny a share the average analysts’ forecast. For its fourth quarter, Staples projected earnings of 50 cents a share, in line with Wall Street’s estimates.

The stock dropped 32 cents to close Tuesday at $30.87. Company shares edged up 3 cents to $30.90 in after-market trade.

The TJX Companies, Inc. (TJX: chart) of Framingham, Massachusetts, said Tuesday that its quarterly earnings climbed 10%, helped by increased sales. The off-price clothing retailer posted a profit of $200.9 million, or 41 cents a share, for its third quarter, compared with a profit of $182.8 million, or 36 cents a share, last year. Results matched the average analysts’ forecast. TJX said cooler weather in October and its expansion into new markets helped boost its sales.

TJX shares shed 75 cents on Tuesday to $24.52.
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