HP shares rise; profit forecast exceeds estimates

Nov 18 | Updated: Nov 19 2005, 07:35am hrs
Shares of Hewlett-Packard Co, the worlds biggest printer maker and the No 2 personal-computer seller, rose after the companys forecast for profit this quarter exceeded analysts estimates.

The shares traded at the equivalent of $30.51 in Germany, up 5.2% from Thursdays closing price of $29 on the New York Stock Exchange. Chief executive officer Mark Hurd said on Thursday he will increase job cuts to help boost profit. Earnings in the fourth quarter beat the companys forecast and profit this period will be 46 cents to 48 cents a share, more than the 44-cent prediction of Goldman Sachs Group Inc analyst Laura Conigliaro, ranked among the most accurate by StarMine Corp.

The company is tracking ahead of our expectations, said Mark Lanyon, an analyst with Morningstar in Chicago, who rates the shares sell and does not own them.

Palo Alto, California-based Hewlett-Packard on Thursday recorded a 67% drop in net income for the quarter ended October 31 after recording a $1.1 billion expense to cut as many as 15,300 jobs, more than a previous estimate of 14,500. Profit at the PC unit doubled as costs dropped and the company won customers from Dell Inc.

Optimism that Hurd will spark earnings and revenue growth have made Hewlett-Packard shares the best performers on the Dow Jones Industrial Average this year. The stock is up 47% since Mr Hurd was named as Carly Fiorinas replacement on March 29.