Analyst John Jones says the 29 cents non-GAAP earnings per share beat his and the consensus estimate of 27 cents, and the $18 billion revenue beat the Street by 1.6% as all segment groups met or exceeded forecasts. He says the primary driver of earnings per share upside was 27.1% gross margin, which exceeded expectations by 50 basis points. He notes strong performance especially in industry standard servers, notebook PC businesses; also, the printing group had another stellar quarter.
Jones sees more cost reductions in the Enterprise Solutions Group and the Personal Systems Group in the coming 12 months. He raised the $1.20 fiscal 2003 (Oct.) earnings per share estimate to $1.22, and upped the $1.50 fiscal 2004 estimate to $1.55. He keeps his outperform rating and the $24 target.