Hewlett-Packard (NYSE: HPQ), an arch competitor of Dell (NASDAQ: DELL), reported Q2 earnings on Tuesday. Looking through the release, I see quite a few things to like about the H-P story.

Revenues increased 11% to $28.3 billion. This increase was aided by international sales and the weak dollar. On an adjusted basis, earnings per share increased 24% to 87 cents. Furthermore, the adjusted operating margin increased 100 basis points to 10%. Cash generated from operations was $4.8 billion during the quarter, which the release categorized as a record statistic. Cash flow is one of my favorite metrics, and I love it when it is doing well. In fact, according to the transcript of the conference call at Seeking Alpha, the six-month operational cash-flow figure had increased 92% over the comparable time frame one year ago, and free cash flow had more than doubled for the same period.

Honestly, it seems like H-P is managing itself very skillfully, leveraging its various brands in the PC sector to great effect. Guidance calls for adjusted earnings of $3.54 and $3.58. This means that, in my opinion, H-P's stock isn't too expensive. It's also trading away from the 52-week high, which is another positive. Of course, the big story surrounding the company at the moment is its announced acquisition of Electronic Data Systems (NYSE: EDS). As Tom Taulli has observed, the EDS buy is logical. Combining H-P's expertise at providing technologies to the PC world with the services portfolio provided by EDS will most likely make HP an even bigger force, and it could give a behemoth like IBM (NYSE: IBM) new challenges.

Continue reading Hewlett-Packard boots up a quarter of earnings and cash-flow growth

Hewlett-Packard boots up a quarter of earnings and cash-flow growth originally appeared on BloggingStocks on Wed, 21 May 2008 08:20:00 EST. Please see our terms for use of feeds.

Continue reading Five stocks to love from CNNMoney

Five stocks to love from CNNMoney originally appeared on BloggingStocks on Mon, 19 May 2008 16:19:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY:

• Smith & Nephew (NYSE: SNN) was cut to Underweight from Neutral at JP Morgan, citing deteriorating fundamentals in several of SNN's key business lines.
  
• Goldman removed British Sky Broadcasting (NYSE: BSY) from its Conviction Buy List and said shares continue to trade at all-time low multiples and that the timing with Sky-Virgin dispute remains unclear. Shares remain Buy rated.
  
• Friedman Billings downgraded Electronic Data Systems (NYSE: EDS) to Market Perform from Outperform based on valuation following the Hewlett-Packard (NYSE: HPQ) news.

• Goldman downgraded J Sainsbury (OTC: JSAIY) to Neutral from Buy and removed shares from the Conviction Buy List.
  
• Goldman also removed Hewlett-Packard from its Conviction Buy List.
  
• Citigroup cut BearingPoint (NYSE: BE) to Hold from Buy.
  
• Wachovia downgraded LHC Group (NASDAQ: LHCG) to Market Perform from Outperform.

Analyst downgrades: SNN, BSY, JSAIY, BE, LHCG and EDS originally appeared on BloggingStocks on Tue, 13 May 2008 11:33:00 EST. Please see our terms for use of feeds.

Funny Bidness -- Drive a tank over a car: fun times originally appeared on BloggingStocks on Mon, 15 Oct 2007 18:39:00 EST. Please see our terms for use of feeds.

The New York Times [registration] suggests that Dell Inc. (NASDAQ: DELL) plans a big push into computer services as part of its makeover. Its big scoop? Dell hopes to go from $5 billion to $20 billion in services revenue by 2015.

This is actually more of a change than it might appear. That's because CEO Michael Dell recruited Stephen F. Schuckenbrock last December from Electronic Data Systems Inc. (NYSE: EDS) to lead its services business, which currently gets most of its revenue from technical support and maintenance on Dell machines.

But to reach the $20 billion target, Schuckenbrock will need to build Dell into more of a computer services powerhouse. If Dell hits its target, that $20 billion will still represent 40% of International Business Machine's (NYSE: IBM) $50 billion in estimated 2007 services revenue. And the gross margins on services business, at 30% for IBM, could add a significant amount to Dell which earns a relatively paltry 18% gross margin.

If Dell can pull off this big rise in services revenue, it could make me want to look at something I have not thought about in years -- buying Dell stock.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the stocks mentioned.

Is Dell (DELL) breathing down IBM's (IBM) neck? originally appeared on BloggingStocks on Sat, 08 Sep 2007 17:40:00 EST. Please see our terms for use of feeds.

Electronic Data Systems (NYSE:EDS) opened today at $28.27. So far, the stock has hit a low of $28.17 and a high of $28.39. As of 10:13 this morning, EDS was trading at $28.34, up $0.07 (0.25%) on extremely heavy volume.

After hitting a one year low of $22.42 on July 18, 2006, the stock snaked up 26.7% to a 52-week high of $28.40 yesterday at 2:59 in the afternoon. Electronic Data Systems reported earnings last week and investors seem to like the direction the company is headed. The technicals for EDS have been strongly improving lately and S&P gives the company a 4 STAR (out of 5) buy rating with a current 12-Month target price of $32.

For a neutral hedged play on EDS, I would consider a June covered call at the $27.50 level. There is even a small dividend on the stock with a 0.7% annual yield.

Vic Schiller is an analyst on the move at Investors Observer. (Free Subscription)

DISCLOSURE NOTE: Mr. Schiller owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.

EDS quietly hits 52-week high in heavy volume originally appeared on BloggingStocks on Tue, 13 Feb 2007 11:15:00 EST. Please see our terms for use of feeds.

Numbers are Actual vs. Estimate

• InterActiveCorp (NASDAQ: IACI) 67c vs. 53c
• Retailing revenue increased to offset a lower price point average, and a higher average return rate. International revenue increased slightly, but profits were hurt by higher operating expenses. Ticketing volume increased as ticket sales rose 4% on 7% higher overall revenue per ticket.
  

• National-OilWell Varco Inc (NYSE: NOV) $1.35 vs. $1.06
• High energy prices stirred demand for drilling equipment which created a backlog of capital equipment orders for the Rig Technology segment.
  

• Electronic Data Systems Corporation (NYSE: EDS) 47c vs. 36c
• "On balance," said chairman and CEO Mike Jordan, "This was the strongest quarter... since I joined the company in 2003." Performance was driven by $7.6B in fourth quarter contracts, up 43% from the previous year.

Continue reading High (and low) lights from this week's earnings releases

High (and low) lights from this week's earnings releases originally appeared on BloggingStocks on Fri, 09 Feb 2007 15:03:00 EST. Please see our terms for use of feeds.

MOST NOTEWORTHY: Palm Inc. (PALM) and SiRF Technology (SIRF) topped today's list of upgrades.

• ThinkEquity upgraded Palm, Inc. (NASDAQ:PALM) to Buy from Accumulate and said that the delay in 750 certification, Palm's shortfall, should be resolved by the early part of the third quarter.
• Morgan Stanley upgraded shares of SiRF Technology Holdings, Inc. (NASDAQ:SIRF) to Equal-Weight from Underweight; they now believe consensus estimates are in-line with their own.

OTHER UPGRADES:

• The Bombay Co. (NYSE:BBA) was upgraded to Buy from Neutral at Friedman Billings Ramsey; they believe management has worked hard to turn the company around and that Bombay has the ability to make money over time.
• Pacific Crest upgraded BEA Systems (NASDAQ:BEAS) to Outperform from Sector Perform with a $16 target and said BEA System's sell-off is overdone.
• Harmony Gold (HMY) was upgraded to Neutral from Underweight and Newmont Mining (NEM) to Overweight from Neutral at HSBC.
• Lehman Bros. upgraded Electronic Data Systems (EDS) to Overweight from Equal-Weight with a $32 target; following discussions with management, Lehman's confidence in the company's ability to cut costs and increase margins have improved.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

Analyst upgrades 11-28-06: Palm upgraded to Buy originally appeared on BloggingStocks on Tue, 28 Nov 2006 11:03:00 EST. Please see our terms for use of feeds.

Futures are positive in early morning trade, pointing to a higher start for stock.

Today investors will analyze the data from the retail sector, they will look at some economic indicators for an idea about employment, inflation and productivity. Strong retail sales could help the market rally, as are the falling oil prices of this morning.

This morning, some retailers have already reported same-stores sales and the market is now looking for a 3.4% rise in October for the industry, or a 4.9% increases ex-Wal-Mart Stores, Inc. (NASDAQ:WMT). Wal-Mart said last week it is expecting a 0.5% gain in same-store sales (sales at stores that have been open at least a year). It had just reported as expected.

Already reporting sales data this morning are Costco Wholesale Corp. (NASDAQ:COST) with a 4% rise, Pier 1 Imports, Inc. (NYSE:PIR) with an over 13% decline in sales, and American Eagle Outfitters, Inc. (NASDAQ:AEOS) that reported an 8% jump in same-store sales last night. AEOS also raised third-quarter earnings guidance. The stock might still be under pressure as some were expecting a 10% rise in sales. Walgreen Co. (NYSE:WAG) Oct same-store sales rose 11.4% and J.C. Penney Co.'s (NYSE:JCP) sales rose 8.1%.

This morning, some economic data is also due out. First, weekly jobless claims will be released at 8:30, but investors are waiting the main job report tomorrow. Also at 8:30, third-quarter productivity and unit labor costs will be reported. Unit labor cost could give investors a better idea about inflation, so barring any surprises, this is the number to watch out for. Finally, at 10:00, September factory orders are due. The European Central Bank makes its decision on interest rate today.

Top news stories this morning:

According to the Wall Street Journal, Tribune Co. (NYSE:TRB) said that due to low bids, it is now prepared to sell parts of the business and will consider offers.

Unilever NV/PLC (NYSE:UN, UL) reported a third-quarter profit drop of 48% after one-time gains from asset sales. Sales rose 1.6%. The figures were at the top end of market forecasts. Unilever shares were up over 4% in Europe.

Reporting today:

• Caremark Rx Inc. (CMX) - 63 cents per share for Q3.
• CVS Corp. (CVS) - 32 cents per share for Q3.
• International Paper Co. (IP) - 43 cents per share for Q3.
• Whole Foods Market Inc. (WFMI) - 29 cents per share for Q4.

Other stories:

Electronic Data Systems Corp. (EDS) reported third-quarter after the bell yesterday with profit climbing sharply to 24 cents per share on a 9% increase in revenue of $5.29. However the company said contracts for future work declined. Analysts were expecting 20 cents per share.

Apple Computer, Inc.'s (NASDAQ:AAPL) new iPod Shuffle will arrives in stores this Friday, tomorrow.

Goldman Sachs upgraded Dell, Inc. (NASDAQ:DELL) to neutral from sell.

General Electric Co. (NYSE:GE) has signed a $300 million deal with a Chinese company to make jet engine parts for it.and French engine maker Snecma.

In the auto industry:

• New car registrations in Germany are expected to have risen in October with foreign automakers boosting their share of Europe's biggest car market to 36.1%.
• Advanced Auto Parts Inc. (NYSE:AAP) reported Q3 (ending Oct 7) net income dropped to $58.9 million, or 56 cents a share but it includes 3 cents a share in stock option expense. Revenue rose to $1.1 billion from $1 billion. Analysts expected earnings of 54 cents a share. The company also lowered Q4 guidance.

Following Baidu.com, Inc.'s (NASDAQ:BIDU) earning, yesterday I revisited rumors of Google, Inc. (NASDAQ:GOOG) or Yahoo!, Inc. (NASDAQ:YHOO) buying Baidu.

Google is releasing a new version of its mobile email today.

Hewlett-Packard (NYSE:HPQ) will have a fourth quarter earnings call on Thursday, Nov. 16, 5:30 p.m. ET/2:30 p.m. PT here.

Wendy's (NYSE:WEN) is offering DVD movie kiosks at its restaurants.

In Pharma: Global pharmaceutical sales grew 5% in the 12 months to August in leading markets, the same rate as recorded a month earlier. Pfizer Inc's (NYSE:PFE) Lipitor cholesterol pill remained the top-selling drug with sales of $11.6 billion.

Russian oil output fell again in October partly because the country and Exxon Mobil (NYSE:XOM) holding back the start up of full-scale production due to differences.

XM Satellite Radio (NASDAQ:XMSR) and Cingular Wireless (held by AT&T (NYSE:T)) announced a partnership to stream 25 XM music channels to Cingular handsets.

Before the bell 11-2-06: Retail sales could help stocks originally appeared on BloggingStocks on Thu, 02 Nov 2006 08:28:00 EST. Please see our terms for use of feeds.