Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : HWP -- Hewlett Packard -- Ignore unavailable to you. Want to Upgrade?

To: BelowTheCrowd who wrote (3038)	5/12/1999 9:26:00 AM
From: Racso	Read Replies (2) \| Respond to of 4722

Sal Bros increases earning estimates on HWP HWP: Expect Good F2Q on Monday, May 17; EPS Raised Slightly; Buy Analyst John B. Jones Date 05/12/1999 Company Hewlett-Packard Co. Back --SUMMARY:--Hewlett-Packard Co.--Server & Enterprise Hardware * HP will announce F2Q99 results on Monday, May 17 after market closes. A conference call is scheduled at 5:00 p.m. EDT. * We have raised our EPS estimate from $0.80 to $0.83 for the quarter. The consensus estimate is $0.79. * The company is feeling rather bullish about its overall prospects which is partly being supported by its 4/13 midrange UNIX server announcement. * We also note that HP has turned its usual analyst meeting at The Pierre Hotel in NYC on 6/2 to an all-day event with break-out sessions after the formal presentation. This is a clear demonstration of HP's willingness to disseminate more information and detail than it has historically provided. --EARNINGS:----------------------------------------------------------------- FYE 1 Qtr 2 Qtr 3 Qtr 4 Qtr Year Actual 10/98 EPS $0.86A $0.70A $0.59A $0.79A $2.94A Previous 10/99 EPS $0.92A $0.80E $0.83E $0.96E $3.50E Current 10/99 EPS $0.92A $0.83E $0.83E $0.96E $3.53E Previous 10/00 EPS $1.07E $0.98E $0.94E $1.11E $4.10E Current 10/00 EPS $1.07E $0.98E $0.94E $1.11E $4.10E Previous 10/01 EPS $N/A $N/A $N/A $N/A $N/A Current 10/01 EPS $N/A $N/A $N/A $N/A $N/A Footnotes: EPS are fully diluted. FUNDAMENTALS Current Rank........:1-M Price 05/10/99......:$80.37 Prior Rank..........: Target Price........:$90.00 P/E 10/99...........:22.8X 52 Wk Price Range...:81.93 - 48.56 P/E 10/00...........:19.6X Proj. 5yr EPS Grth..:15.0% Return on Equity 98.:17.60% BookValue...........:$20.13 LT Debt-to-Capital..:11.22% Dividend............:$.64 Revenue 1999........:$53620.00 mil Yield...............:.8% Shares Outstanding..:1076.00 mil Convertible.........:Yes Mkt. Capitalization.:$86478.12 mil Hedge Clause(s).....: Comments............: OPINION For F2Q99, we expect revenue to grow 3.5% year over year. Gross margins should be up by 110 basis points to 32.8% from 31.7% a year ago. Operating margin is forecast to be 9.0%, up from 7.2% a year ago. Printers: We expect HP to maintain or perhaps gain market share in both the laser and inkjet space. Both competitors, Canon and Epson (despite aggressive marketing) are feeling pressure from HP's new product lines. Measurement: This business should benefit from the positive economic and business trends that are beginning to unfold in Asia. The closing of HP's semiconductor fab in Colorado a quarter ago, and the reduction of 1,800 employees from this business should also help. PCs: HP continues to make gains in consumer PCs which is 20-25% of the company's PC business. The commercial side is expected to produce growth rates in the teens this quarter. Servers: We expect revenue to be down 12-15% on a dollar basis year-over-year. This is a slight improvement from last quarter's 18% year-over-year decline. However, with recent shipments of the midrange N-Series, coupled with shipments of the high-end V-Series that began in February, we expect at least a 30-point sequential uptick in the next two quarters which should be followed by two more quarters of easy year-over-year comparisons. We expect the next few quarters to showcase strong demand for HP's servers from the company's customer base. Customer endorsements of the N-Series were impressive. SIAC plans to upgrade its fleet of 850 K-class servers to the N-Series. --------------------------------------------------------------------------