Overseas Markets Drive H-P Profit

Updated from May 20

Hewlett-Packard(HPQ Quote - Cramer on HPQ - Stock Picks)grew its bottom line 16% in its fiscal second quarter, as the company's foothold in overseas markets offset weakness in the U.S.

The results were no surprise: H-P preannounced its financial results last week, along with news that it struck a $13.9 billion deal to acquire technology consulting company EDS (EDS Quote - Cramer on EDS - Stock Picks).

Shares of Hewlett-Packard opened at $46.20 on Wednesday morning.

Palo Alto, Calif.-based H-P said Tuesday that it benefited from strong demand in emerging economies such as Brazil, Russia, India and China, where the company's overall pool of revenue was up 26% year-over-year.

But H-P's sales in the U.S. were flat compared to this time last year, representing the slowest growth on its home turf in at least two years.

In a post-earnings conference call, CEO Mark Hurd described the U.S. market as "spotty" during the quarter, with demand varying by industry and by product type.

"It's just a mixed bag," said Hurd. "There's good numbers in there. And there's some numbers we wished were better."

A weakening U.S. economy, weighed down by the housing market and the financial credit crunch, has caused concern that consumer and corporate spending on technology products will dry up.

H-P, which generates 70% of its sales outside the U.S., is better positioned to withstand a U.S. slowdown than some of its competitors, such as Dell(DELL Quote - Cramer on DELL - Stock Picks).

For the three months ended April 30, H-P had revenue of $28.3 billion, up from $25.5 billion at this time last year.

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