Strong earnings expected from HP

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MARK AUSTIN THOMAS: Hewlett Packard has struggled with its pretexting scandal. In fact, just yesterday former HP chairwoman Patricia Dunn was in court. She pleaded not guilty to charges of fraud and identity theft related to efforts to spy on board members and journalists. But despite the headlines, the company seems to be going strong financially. HP will release quarterly earnings later today. The company's profits are expected to be up 25 percent compared to a year ago. Diantha Parker reports.


DIANTHA PARKER: Analysts expect HP will notch a 5 percent increase in total revenue this quarter — or just over $24 billion.

Despite the legal troubles in the boardroom, HP is now leaner and better run than it has been in years.

New CEO Mark Hurd gets much of the credit for the turnaround.

Morningstar analyst Rick Summer says the company has beaten its biggest rival: the bloated, complacent, old HP of the past.

Still, Summer thinks the company's shares are currently overvalued.

RICK SUMMER: We think they're a little extended and a little ahead of what they're worth today in terms of a stock price. I think a lot of people are going to be looking at the PC and the hardware market.

While HP has cornered the printer market, Summer says the company need to boost sales of other computer hardware like laptops and servers to really stay ahead.

I'm Diantha Parker for Marketplace.

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