H-P jumps on earnings

Hewlett-Packard Co. (NYSE: HWP) shares rose 6 1/4 to 95 on Tuesday after H-P beat second quarter expectations. The company is also expected to announce plans to concentrate on e-business.

On Monday, the technology earned $918 million, or 88 cents a share in the quarter on sales of $12.4 billion. Strong PC servers, mobile products and home PCs, and CD products sales were cited for the improved results. Among imaging devices, the company shipped more than 1 million scanners.

"Hewlett-Packard finally had a quarter where revenue, expenses and orders lined up positively," said Steve Milunovich, analyst at Merrill Lynch in a morning report.

Merrill Lynch boosted its 1999 estimate five cents to $3.50 a share and the following year to $4 from $3.90. BancBoston Robertson Stephens raised this year to $3.55 from $3.45 and 2000 expectations were boosted 5 cents to $3.95. Morgan Stanley Dean Witter raised its price target to $110 from 90.

First Call's survey of 21 analysts predicted a profit of 80 cents for the quarter.

In the year-earlier period H-P earned $685 million on revenue of $12 billion a year earlier. The first quarter and the fourth quarter also had lackluster revenue growth.

The Palo Alto, Calif. company is set to announce its plans to address the Internet services market. For the technology giants, the Web means big business. Last week, IBM Corp. (NYSE: IBM) gained after the company said it expects about 25 percent of its revenue to come from Internet services.

H-P is also working to shed its stodgy image. The company is splitting into two companies, and its long-time leader Lewis Platt, announced plans to step down.

In related news, Dell Computer Corp. (Nasdaq: DELL) reports first quarter results after the bell today. Analysts expect Dell to come in line with expectations, but have a wary eye on its second half.