This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

H-P Humming Along

In a quarter that has wounded so many tech giants, Hewlett-Packard's (HPQ) bottom-line beat on Tuesday had its investors feeling giddy amid another down session in tech stocks.

Thanks to strong profit margins across many of its key businesses, H-P boosted its net income by more than 50% year over year, with an EPS several cents above Wall Street estimates -- the latest in a string of impressive results produced by the company's restructuring plan.

"HP is a company that we think is really in a sweet spot right now," said Mark Hillman, the chief information officer of Hillman Capital Management, which has a long position in the company. "We think CEO Mark Hurd is just getting started as far as making the enterprise more efficient and more profitable."

The company achieved 24.8% gross margins and 8% operating margins during its fiscal second quarter, its highest level in years, according to analysts.

And the prospect that even more savings lie ahead was enough to put aside, at least for the moment, any questions about the company's top line, which grew 5% year over year to $22.6 billion during the quarter.

Shares of H-P were recently up 3.7%, or $1.14, at $32.25 on Wednesday morning.

By contrast, shares of Intel (INTC), Dell (DELL) and Microsoft (MSFT) are all down or flat this earnings season.

A tech landscape clouded by slowing PC demand and rumors of price wars has contributed to the Street's glum outlook. (Indeed, the Nasdaq was falling another 1% on Wednesday.) But investors appeared confident that the course set by H-P's management would protect the company from any unpleasantness.

"In the current environment, HPQ could be one of the best defensive stocks, providing both a shelter in the midst of a battered tech tape and a solid opportunity for upside," wrote Goldman Sachs analyst Laura Conigliaro in a note to investors raising her earnings estimates for H-P. (Goldman Sachs has received compensation from H-P for investment banking and noninvestment banking services in the past 12 months and is a specialist in H-P securities).

To view Street Insight's video review of Hewlett-Packard, please click here .

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,053.71 +23.50 0.13%
S&P 500 2,088.77 +6.89 0.33%
NASDAQ 4,806.8590 +33.3870 0.70%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs