Hewlett-Packard Co gave shareholders a super-bullish picture of the Cupertino company’s business in 1988 at the annual meeting on Monday. The company has perhaps the best new products offering in the 30 years I have been at Hewlett-Packard, president John Young told the meeting, and chairman and co-founder David Packard echoed this by saying that he does not remember a time when things looked as good as they do now. Hewlett reported first quarter profits up 51% at $179m on turnover up 26% at $2,200m: the improvement in profits was in part due to expenses rising only 24% against the 26% rise in sales, in part because the tax rate fell to 31% from 34%. The company expects expenses for the rest of the year to rise in line with turnover, but for the tax rate to remain at 31%, implying that profits should show year-on year improvements ahead of turnover, but at a more modest rate than the 51% of the first quarter: Hewlett earned 71 cents a share in the period and says it is comfortable with analysts’ forecasts of $3.20 to $3.30 a share for the full year. Nevertheless there is still the economy to contend with, but while there are macroeconomic events that could have an adverse and perhaps major effect on our operations, said Young, we see no impacts of these kinds of macroeconomic events on our orders yet. One piece of particularly good news was that the weak dollar is already feeding through in the shape of bigger business – Hewlett reckons its share of the Japanese market for test and measurement equipment has risen 50%. Shareholders emphatically voted down a motion that Hewlett should pull out of South Africa, where annual sales of $48m are less than 1% of the total.
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