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From Alpha

Are we in a recession? Hewlett Packard says a resounding NO.
Hewlett Packard (NYSE: HPQ) joined Microsoft (MSFT) and IBM (IBM) in producing excellent results. HP announced its first quarter results on Tuesday and beat all market expectations. With revenues of $28.5 billion, the company recorded a 13% growth over $25.1 billion reported in the same period last year. Sequentially, the revenue was up marginally by 0.7% from $28.3 billion for the previous quarter. The revenues were higher than market expectations of $27.6 billion.
Sequentially, the earnings (non-GAAP) were flat at $0.86 per share. However, it was substantially higher than market expectations of $0.81 per share, and 33% higher than last year’s $0.65 per share.
HP has been focusing on building its presence in emerging markets. This is evident in its current quarter's results. Forty percent of the revenues were from U.S. markets, 43% from EMEA (Europe, the Middle East and Africa), and 17% from Asia Pacific. In the previous year, the Americas contributed 41%, EMEA 43%, and Asia Pacific 16%. Year-on-year, the highest growth was reported in the Asia Pacific segment with 22%, followed by EMEA growth of 15% and America’s 8%. [Read: HP Looks Recession Proof.]
Segment-wise, Imaging and Printing [IPG] revenues of $7.3 billion were up 4% year-on-year and contributed 26% of the overall revenue. The Personal Systems Group (PSG) brought in 38%, Services brought in 15%, and Enterprise Storage & Servers [ESS] brought in 17% of the revenues. Financial Services and Software each contributed 2% to the revenue pie.
HP spent $3.3 billion on share repurchases in Q1, and expects similar volume of repurchases in the coming quarters.

In terms of outlook, HP expects annual revenues to be between $113.5 and $114 billion compared to market expectations of $112 billion. Sequentially, Q2 revenue outlook of $27.7 to $27.9 billion is higher than market expectations of $27.5 billion.
With the company's view of unfavorable component pricing environment – especially in the memory segment, HP expects a lower non-GAAP EPS of $0.83 to $0.84 which is marginally higher than analyst view of $0.82. For fiscal 2008, non-GAAP EPS outlook is at $3.50 to $3.54 higher than market expectations of $3.37.
In the extended hours trading session on Tuesday, the stock rose 5%, before settling down at $43.95, which is up $0.08 from the previous close of $43.87. On Wednesday morning, it was trading around $47.50, which injected a huge dose of desperately sought positive momentum into the rest of the technology sector.
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Despite a market cap of $113.1 billion, HP has delivered returns comparable to small-cap growth stocks. It is impeccably managed, with tight cost controls, and a well-thought out growth strategy. It is a true blue-chip that has regained its stride in a wonderful way.