HP’s shares stand at a four-year high after a Q3 report

HP’s stock rose 13 percent in a single day after the company reported its third quarter results for fiscal 2005. The price of the stock was the highest since just before HP announced its deal to acquire Compaq in 2001. Even though the quarter’s total earnings were a small fraction of last year’s same-period, the company outstripped analyst estimates by 50 percent for the period — before subtracting a $1 billion chargeback for repatriating nearly $15 billion in overseas earnings.

Andrew Neff of analyst house Bear Stearns set a target price of $35 a share for the stock, which had not poked above $24 a share for more than a year. But the Q3 report pushed the shares to above $26, where they remained thoughout the week after the report. HP set a target of 44 to 47 cents a share for its earnings in the fourth quarter, the strongest period of each fiscal year. Revenues for Q3 rose almost 10 percent to $20.8 billion, also beating analyst estimates.

HP’s Enterprise Storage and Servers business, home of HP 3000 alternatives for migrating customers, increased its profitability over the red-ink same period of 2004. The unit posted operating profits of $150 million, after a loss of $211 million a year ago. Revenue for the enterprise business rose to $4 billion from $3.3 billion.