NEW YORK - Hewlett-Packard Co. surprised Wall Street on Tuesday by saying its earnings will be slightly above analysts' expectations, going against the grain as other technology bellwethers have slashed forecasts and posted weak results in the sagging economy.
Its shares climbed more than 12 percent in morning trading.
The Palo Alto, Calif.-based computer and printer maker expects earnings of 84 cents per share and adjusted earnings of $1.03 per share for the three months ended in October. This is slightly better than the $1 per share, excluding items, that analysts polled by Thomson Reuters are expecting.
HP forecast revenue of $33.6 million, just ahead of analysts' expectations of $33.09 billion.
The company, which plans to release full quarterly results on Nov. 24, said in a statement that it was benefiting from "global reach, diverse customer base, broad portfolio and numerous cost initiatives."
HP's $13.9 billion acquisition of Electronic Data Systems Corp., completed in August, boosted the quarter's revenue, which grew 19 percent year-over-year — or 16 percent when adjusted for the effects of changing currency exchange rates. Without counting EDS, HP's revenue grew 5 percent, or 2 percent when adjusted for currency effects.
HP's solid guidance comes as many other bellwethers in the technology sector are hunkering down because consumers are businesses are putting off spending on PCs and other equipment. Research firm IDC recently cut its prediction for growth in worldwide information technology spending to 2.6 percent in 2009, down from its earlier forecast of a 5.9 percent increase.
Cisco Systems Inc. warned this month that orders for its computer networking gear fell abruptly in October, and said it expects sales to fall in the current quarter. Intel Corp., the world's No. 1 chip maker, cut its fourth-quarter profit and revenue forecast last week because of lower demand.
In the current fiscal quarter, which ends in January, HP forecast earnings of 80 to 82 cents per share, with adjusted earnings of 93 to 95 cents per share, on sales of $32 billion to $32.5 billion.
Analysts were predicting a profit of 93 cents per share on sales of $33.7 billion.
Shares jumped $3.40, nearly 12 percent, to $32.74 in morning trading Tuesday. The stock was still down roughly 34 percent year-to-date, compared with about 37 percent for the Dow Jones industrial average.