HP raises its estimates

Higher than expected sales of desktop PCs, printers, scanners and digital cameras have prompted Hewlett-Packard to increase its previous earnings estimates for the first fiscal quarter that ended January 31 2002.

In a recent announcement, the company said the revised estimates are based on an up-tick in consumer demand that has affected its hardware lines.

When HP reported its fourth-quarter earnings in November 2001, the company said it expected first-quarter 2002 results to be down slightly from the fourth quarter, based on normal seasonal trends.

The increased hardware sales, combined with continuing cost-savings measures, mean that the company now expects increased gross margins with expenses approximately flat with fourth-quarter levels. HP said it expects earnings substantially above current consensus analyst estimates of 16 cents a share.

"Economic conditions around the world continue to be challenging, but consumer technology spending is clearly showing some strength," said Carly Fiorina, HP's chairman and CEO, in a statement. "As a result, we are seeing better than expected revenues in our PC and imaging and printing businesses. We are not relenting on the expense side and continue to take decisive actions to improve our cost structure.

HP's merger target, Compaq has also announced that it has beaten analyst expectations for the fourth quarter 2001 and was raising its earnings estimates for 2002.