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DJ H-P Seen Meeting 4Q Views, To Offer Cautious Outlook >HPQ

By Donna Fuscaldo Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Thanks mainly to Hewlett-Packard Co.'s (HPQ) strong printing and imaging unit, analysts widely expect the company to meet earnings expectations when it reports fiscal fourth quarter results later Wednesday.

As for its enterprise systems business, which includes servers and storage, industry watchers aren't bracing for much growth.

"We expect an in-line quarter from H-P this evening, marked by weakness in the enterprise segment and strength in the imaging segment," wrote Mark Specker, an analyst at SoundView Technology Group, in a research report Wednesday.

H-P's imagining unit will likely have "abnormally" high margins, which will counterbalance "abnormally" low margins in its enterprise segment, he said.

According to the analyst, who is calling for H-P to report earnings of 23 cents a share and sales of $17.4 billion, the key for H-P in fiscal 2003 is a recovery in profitability in its enterprise unit.

Specker said his full-year fiscal 2003 estimate of $1.22 a share is predicated on a recovery in its enterprise segment to near break-even.

Specker does not own shares of H-P; SoundView doesn't have an investment banking relationship with H-P.

Analysts, according to Thomson First Call, have the Palo Alto, Calif., computer hardware and software maker weighing in with earnings of 22 cents a share on sales of $17.29 billion. In the year ago fourth quarter, H-P reported earnings of 8 cents a share and sales of $18.16 billion.