Investing

Cramer Expects Hewlett Packard to Beat EPS Estimates

On tonight’s MAD MONEY on CNBC, Jim Cramer came out talking about all the core bit part prices coming down for products inside computers.  Cramer thinks that DRAM is money in the bank, but not for DRAM makers.  The way to win is the upcoming major upside surprise on May 16 that will be from Hewlett Packard (HPQ-NYSE).  Cramer said it hasn’t participated in the rally and that will change when it reports.  The upside will come because the computer components cost less and less.  The new printers are going to breakthrough as well.  This is one that will win because of margin expansion.  The price savings goes right to the bottom line and Cramer thinks the EPS will be much better than $0.65 and will earn more than consensus for the year.  It also does 1/3 of its business in the US, and this could add 5% or more to the bottom line because of the dollar devaluing.

Jon C. Ogg
May 3, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.