Shares of Hewlett-Packard Company (NYSE: HPQ) experienced heavy activity in after-hours trading, up 2.42% to $47.91 after-hours, moving on the company�s second-quarter results.
Hewlett-Packard reported second-quarter profit of $3.5 billion, or $1.09 per share, which is an increase of 27% from the same period last year. Revenue climbed 13% to $30.8 billion. The results were ahead of consensus estimates. The company has also raised its full-year forecast. It now expects revenue to increase by 8%-9% for the full year. It has raised EPS estimate from $4.37-$4.44 to $4.45-$4.50. The company has accounted the expenses related with Palm (NASDAQ: PALM) in its full year estimates. However, it has not accounted for any potential revenue from Palm in the forecast. For the third quarter, the company is now expecting EPS of $1.05-$1.07 on revenue of $29.7-$30 billion.
Mark Hurd, HP�s CEO, said that the company�s transformation process has been successful as it has been able to capitalize on changing consumer and business habits. Obviously, the company is expecting to benefit a lot from the acquisition of Palm. The company plans to use Palm�s WebOS in its tablet PCs, which it plans to launch later this year.
HP is currently has a P/E ratio of 14.13. This is lower than Dell�s (NASDAQ: DELL) 20.54 and Apple�s (NASDAQ: AAPL) 21.42. The stock is trading on a multiple of 10x its projected earnings for the full year. The stock certainly has some upside potential. A lot depends on how HP integrates Palm into its operations and uses its WebOS system.
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