Hewlett-Packard Profit Soars

Elena
17 Aug, 2006
New York City

Stock futures pointed to a flat opening following three consecutive sessions of gains. Tech stocks are expected to rise after Hewlett-Packard reported Q2 profit jump to $1.38 billion, or 48 cents a share, compared with $73 million, or 3 cents a share a year ago due to strong sales in its printing and personal-computer businesses. Revenue rose 5.2% to $21.89 billion. The company also authorized a buyback of up to $6 billion worth of company stock.

[R]8:00AM Stock futures pointed to a flat opening.[/R]
U.S. stock futures pointed to a flat market opening following three consecutive sessions of gains. Tech stocks are expected to rise after Hewlett-Packard ((HPQ)) reported Q2 profit jump to $1.38 billion, or 48 cents a share, compared with $73 million, or 3 cents a share a year ago due to strong sales in its printing and personal-computer businesses. Revenue rose 5.2% to $21.89 billion. Revenue from HP's printer division grew 5% to $6.2 billion, while sales of laptops increased 14%.Software sales were particularly strong, with 30% year-over-year growth. The company will likely complete the $4.5 billion acquisition of management software company Mercury Interactive Corp. in the current quarter. Hewlett-Packard Co. CEO Mark Hurd said that an aggressive cost-cutting campaign would start in the current quarter, with several thousand employees losing their jobs. In addition, the company authorized a buyback of up to $6 billion worth of company stock. Dell Computer Inc. ((DELL)) is scheduled to report quarterly results in the late afternoon.

Among retailers, releasing quarterly results, Sears Holding Corp. ((SHLD)) posted Q2 net income jump to $1.88 per share from 98 cents per share a year ago due to improved margins. Apparel retailers will also be in the spotlight, after Children's Place Retail Stores Inc. ((PLCE)) posted a wider Q2 loss and New York & Co. ((NWY)) reported lower profit. Gap Inc. ((GPS)) and department store chain Nordstrom ((JWN)) are set to report after the closing bell. S&P 500 futures were down 0.7 points, slightly below fair value. Dow Jones industrial average futures rose 5 points, and Nasdaq 100 futures lost 1.25 points.


[R]7:30AM Exporters advanced in Asia, while oil-related stocks plunged[/R]
Asian markets were mixed on Thursday. Nikkei 225 Average in Japan shed 0.31% to 16,020.84. Nissan Motor gained 2.36%, leading auto stocks for the second running. Sony Corp. Gained 0.39% to break a two-day losing streak. Daiwa Securities Group surged 4.48% as recent gains by the Nikkei boosted hopes that trade would pick up.

Hong Kong''s Hang Seng Index closed down 0.45% at 17,373.05. Lenovo Group rose 5.6% as fellow PC maker Hewlett Packard posted a strong quarterly profit. South Korea''s Kospi index advanced nearly 1% on large gains by chip-maker Hynix Semiconductor and Samsung Electronics. Australia''s S&P/ASX 200 advanced nearly 2% as Qantas Airways and BHP Billiton both advanced. while China''s Shanghai Composite shed 0.8%.


[R]6:30AM European markets advance despite declining oil shares.[/R]
European markets were higher by mid-morning on Thursday. London’s FTSE 100 added 0.2 per cent to 5,909.2, while Xetra Dax in Frankfurt was 0.2% higher at 5,823.21 and in Paris, the CAC 40 was 0.2% higher at 5,136.57. Swiss insurance firm Zurich Financial Services Group, Ciba Specialty Chemicals and NYSE specialist Van der Moolen were the chief movers on the market.

Zurich Financial Services shed 2.2% in the wake of its statement that its first-half net profit rose but premiums declined. Ciba Specialty Chemicals jumped 5.6% after it reported an increase in adjusted profit and said that it would cut jobs. Van der Moolen advanced 4.3% after its second-quarter revenue increased 49% to 40.5 million euros.

Oil prices continued to drop Thursday as international traders responded to U.S. government data showing that crude oil stockpiles are above average. Light sweet crude for September delivery fell 47 cents to $71.42 a barrel in electronic trading, while the Brent crude for October delivery was down 39 cents at $72.44 a barrel on London''s ICE Futures exchange. The euro was higher against the dollar Thursday, extending its gain after U.S. inflation data eroded the likelihood of higher U.S. interest rates.

The euro rose against the U.S. Dollar. The European currency bought $1.2844 from $1.2836 late Wednesday in New York. It had risen above $1.2850 on Wednesday for the first time in a week. The British pound advanced to US$1.8964 from US$1.8948 in New York, and the dollar slipped to 115.59 Japanese yen from 115.87.