On Monday, Nov. 19, Hewlett-Packard (NYSE:HPQ) released earnings for the fiscal year ended Oct. 31.

HP knows where to find new customers: fourth-quarter sales to the China, Russia, India, Brazil bloc (CRIB) (ed: oh, c'mon, BRIC is boring!) grew 37% over last year, and the company makes 67% of its revenue outside U.S. borders.

While the PC marketplace duel at dawn between HP and Dell gets the most press coverage, the enterprise technology segment edged out personal systems revenue last year -- $37.7 billion to $36.4 billion. And the printing group takes the cake for operating profit contributions at $4.3 billion.

Since Mark Hurd took over as CEO two and a half years ago, HP shareholders have seen their stock rise by an annualized 48%.

(Figures are in millions, except per-share data.)

Income Statement Highlights

FY 2007

FY 2006

Change

Sales

$104,286

$91,658

13.8%

Net Profit

$7,264

$6,198

17.2%

EPS

$2.67

$2.17

23.0%

Diluted Shares

2,716

2,852

(4.8%)

Get back to basics with the income statement.

Margin Checkup

FY 2007

FY 2006

Change*

Gross Margin

24.4%

24.3%

0.1

Operating Margin

8.4%

7.4%

1.0

Net Margin

7.0%

6.8%

0.2

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

FY 2007

FY 2006

Change

Cash + ST Invest.

$11,445

$16,422

(30.3%)

Accounts Rec.

$13,420

$10,873

23.4%

Inventory

$8,033

$7,750

3.7%

Liabilities

FY 2007

FY 2006

Change

Accounts Payable

$11,787

$12,102

(2.6%)

Long-Term Debt

$4,997

$2,490

100.7%

The balance sheet reflects the company's health.

Cash Flow Highlights

FY 2007

FY 2006

Change

Cash From Ops.

$9,615

$11,353

(15.3%)

Capital Expenditures

$3,040

$2,536

 19.8%

Free Cash Flow

$6,575

$8,817

(25.4%)

Free cash flow is a Fool's best friend.

Competitive Context

Market Cap

Trailing
P/E Ratio

CAPS
Rating

International Business Machines
 (NYSE:IBM)

$142,370

15.3

***

Hewlett-Packard

$128,770

20.2

****

Dell (NASDAQ:DELL)

$60,060

21.4

**

EMC (NYSE:EMC)

$40,060

27.3

*****

Sun Microsystems (NASDAQ:JAVAD)

$16,420

28.9

***

Latest reported numbers are from Capital IQ.

Keep your partners close and the competition in your vest pocket.

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