Monday, November 19, 2007

H-P has Boom Quarter - Good for Jabil Circuits

Jabil Circuit is one of the leading providers of electronics
manufacturing services (EMS) in the world. Parts made by
Jabil on a contract basis are used in communications
products, computers and computer peripherals, and
automobiles. Services range from product design and
component procurement to order fulfillment and supply
chain management. The company has been rapidly
expanding into Asian and Eastern European markets
in recent years, through acquisitions and new plants.
Nokia Siemens Networks Italy has signed a contract for
the transfer of the manufacturing functions of its Cassina
de’ Pecchi and Marcianise facilities to Jabil Circuit Italy,
upon completion of the legal asset transfer procedure.
Having received European Union (EU) antitrust
authorities approval, the closing is expected to occur
on November 1st. The two companies also signed a l
ong-term manufacturing agreement.

JBL customers include Cisco Systems, Hewlett-Packard,
Nokia (21% of sales), and Philips (12%).

Rex Crum reports:

Hewlett-Packard Co.
(HPQ) on Monday reported a 28%
rise in its fourth-quarter earnings as the computing
and printing giant saw growth across all its main
business areas, leading to revenue of $28.3 billion.

said it earned $2.2 billion, or 81 cents a share, compared
with $1.7 billion, or 60 cents a share, a year ago. Revenue rose
15% from last year's $24.6 billion.Excluding charges and one-
time items, H-P would have earned $2.3 billion, or 86 cents a
share. By that measure, H-P beat the estimates of analysts
surveyed by Thomson Financial, who forecast H-P to earn
82 cents a share on $27.4 billion in sales.

"The momentum on the turnaround, share gain and
seems to be continuing on almost all fronts,"
said Louis Miscioscia, who covers H-P for Cowen & Co. and
holds an outperform rating on the stock.

The H-P results were expected to get more attention
usual due to recent reports from the likes of Cisco
Systems Inc. (CSCO) , IBM Corp. (IBM) and Network
Appliance Inc. regarding slowdowns and concerns about the
outlook for business in the financial services industry.

Hurd highlighted the growth of H-P's software business, which
saw revenue double to $698 million from a year ago. The com-
pany said its software division reported operating profit of
$177 million, with its acquisition of Mercury Interactive leading
the software sales and earnings rise.

Personal systems, or PCs, continued to be H-P's largest revenue
generator, with sales of $10.1 billion, a 31% increase from
last year's fourth quarter. The division's operating profit
climbed to $589 million from $336 million a year ago.
Notebook sales rose 49% from a year ago, while desktop
sales were up by 15%.

Hurd said the growth of H-P's notebook business signifies
the broader changes taking place in the PC industry.
"The world is moving toward mobility. People in emerging
markets, and globally, want [PC] access and we continue to
see a healthy market," Hurd said.
H-P's imaging and printing business continued to be the
company's most-profitable business area, with an operating
profit of $1.1 billion, which was flat with a year ago. Revenue
rose 4% to $7.6 billion. Hurd said the division's earnings
would have increased had it not been for $32 million charge
the company took to account for its plans to shift production
of its digital cameras to an outside manufacturer.

Enterprise storage and servers sales were up 10% from a
year ago to $5.2 billion, as the division's earnings rose to $693
million. H-P's services business revenue rose 7% to $4.4 billion.
"The H-P numbers look very solid," said Shaw Wu, who
covers H-P for American Technology Research. "They were
able to execute in a very tough environment and one of the
few names to guide [estimates] up for the December-
quarter." Wu holds a buy rating on H-P's stock.

For its fiscal first-quarter, H-P forecast a profit of 75 cents a
share on revenue between $27.4 billion and $27.5 billion.
Excluding one-time items, H-P expects to earn 80 cents a
share, while Wall Street analysts had forecast earnings of
77 cents a share on $27 billion in sales.

Separately, H-P said its board authorized an additional
$8 billion for share repurchases and declared a regular
quarterly dividend of 8 cents a share.
In after-hours trading, H-P shares rose 61 cents to $50.05
a share after shedding $1.31 in the regular market session. End of Story

Rex Crum is a reporter for MarketWatch in San Francisco.


The Sage holds a
strong position in Liquidmetal.
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