This summary is based on the second quarter fiscal 2008 earnings call conducted by Hewlett-Packard Company (HPQ: chart) on May 20, 2008.

Management:

Vice President, Investor Relations: Jim Burns
Chairman of the Board, Chief Executive Officer and President: Mark V. Hurd
HP Executive Vice President and Chief Financial Officer: Catherine A. Lesjak

Key Investors Issues

- EPS were 80 cents a share compared to 65 cents a share last year.
- Profit was $2.1 billion compared to $1.8 billion on revenue last year.
- Revenue was $28.3 billion versus $25.5 billion a year ago.

Second Quarter Highlights

Performance continues to be driven by three important factors - cost savings from initiatives across the company, deployment of additional sales resources, and a diverse customer base and a broad portfolio aligned with the growth areas of the market.

- Revenue totaled $28.3 billion, up 11% year over year, or up 5% in constant currency.
- Non-GAAP operating profit was 10% of revenue, or $2.8 billion, up 22% year over year.
- EMEA and Asia-Pacific revenues were each up 16% and the Americas increased 4%. The company generated 70% of total revenue and all of growth outside the United States.

- Gross margin was 24.8%, up 30 basis points compared to a year ago. This gross margin increase was driven by a generally favorable commodity environment and disciplined pricing.
- Non-GAAP operating expenses were $4.2 billion, or 14.8% of revenue, down from 15.5% a year ago. Adjusting for currency, expenses were up just 1% as the company maintained expense discipline while investing in sales and go-to-market resources and absorbing acquisitions.

- Non-GAAP OI&E yielded income of $3 million, down from the prior year primarily as a result of lower net interest income and net losses from currency hedging programs.
- Non-GAAP tax rate was 21%. Non-GAAP EPS was 87 cents per share, up 24% from 70 cents per share one year ago.
- GAAP EPS was 80 cents per share, which included $172 million, or 7 cents per share in after-tax adjustments, primarily related to the amortization of purchased intangibles that were excluded from non-GAAP results.

Imaging and printing revenue was up 6% to $7.6 billion, led by supplies growth of 8%.

- Commercial hardware revenue grew 6%, while consumer hardware revenue declined 3% year over year. Excluding cameras, consumer hardware revenue increased 2%.
- Segment operating profit was $1.2 billion, or 16.2% of revenue.

- In terms of core printing business, the company shipped more than 14 million units, an increase of 6% year over year. The company continued to see solid momentum in growth initiatives.
- Graphic arts business, which is now 10% of IPG revenue, grew in double-digits again.
- Color laser unit shipments increased 22% year over year and printer based MSP shipments grew 41%, buoyed by the introduction of new products.

- Within IPG, the company is focused on reducing costs and has a number of ongoing initiatives to improve supply chain efficiency and lower product costs. At the same time, the company will continue to invest for growth and profitability through commitment to research and development, targeted share gains, growth in graphic arts, and expansion of enterprise printing sales force.

Personal systems continued to post solid results, maintaining the number one worldwide market share position in calendar first quarter, with revenue growing 16% to $10.1 billion and unit shipments increasing 21%.

- PSG maintained balanced growth across the businesses with consumer client revenue up 16% and commercial client revenue up 17%.
- Notebooks continued to be strong with unit shipments increased 46% year over year.
- Segment operating profit was $544 million, or 5.4% of revenue. PSG operating profit increased 30%, reflecting solid execution and, to a lesser extent, benefit from a favorable commodity environment.

Enterprise storage and servers revenue was $4.8 billion, up 4% year over year.

- Industry standard server revenue was flat versus 17% year-over-year compare.
- ISS blade growth continues to be strong with revenue increasing 64%. ESS growth was driven by the strength in storage and business critical systems.

- Revenue in storage grew 14% to just over $1 billion, with the mid-range EVA business growing 17% and the high-end XP business posting 21% growth. The robust storage results reflect the continuing improvements in coverage and go-to-market model, and positive reception of the new EVA and MSA storage products.

Business critical systems revenue posted 7% year over year growth, with integrity server revenue increasing 35%.