HP shares are trading slightly higher in after hours trading, after fiscal q2 earnings of 1.09 per share beat Wall Street consensus by 4cents. Guidance for next quarter is a bit light, but the company is increasing full year (fiscal year ending October) estimates above the consensus.
Revenue was up in each geography, and segment operating income improved quite a bit:
As HP increases their guidance for revenue and earnings, it looks like sales for this year will increase about 8%, with 2011 increasing another 6%. Those are better growth numbers than their fellow uber-mega-large-cap DJIA technology peer, IBM, which is looking at 4% revenue growth this year and next. Despite that, HP trades for 9.5times this year's expected earnings, cheaper than IBM. And that's before netting out balance sheet cash, which is 13% of HP's market value compared to 8% at IBM.
I have Free Cash Flow Yield for HP running at about 9.5-13%, depending on whether you prefer trailing or forward estimates. That is literally triple what HP's 2018 debt is yielding:
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