Tuesday, November 20, 2012

Hewlett-Packard Company (NYSE:HPQ) Would Be Closely Watched As Industry’s Benchmark

Hewlett-Packard Company (NYSE:HPQ)’s fourth-quarter earnings will provide a clear snapshot of the technology pioneer struggle to regain its edge. With increasing market demand for smartphones and tablets ,HP’s personal computers and  printers  losing their appeal in the market.

How Should Investors Trade HPQ’s Earnings? Find Out Here

The company based in Palo Alto, Calif will declare its earnings for fourth quarter spanning from August to October before the market opens on Tuesday. The earnings will likely to highlight the decline of HP’s revenue for fifth consecutive quarter.

According to CEO Meg Whiteman the decline of HP’s earnings is due to poor management of the company during previous years where the company failed to concentrate on innovations in any of its divisions like PCs to printer and software to data storage. Currently HP’s stock prices are trading at $ 12.85 ending last week which is lowest in a decade and the company’s stock prices has gone down by more 40% since Whiteman took the reins of HP 14 months ago.

So far HP CEO Whitman has focused on job cutting and reorganization of company’s structure to create confidence in investors and analysts for a turnaround which will take several years.

Recent research reports suggest HP is losing its PC market to rival Lenovo Group Ltd which is now world’s top seller of PCs. Also HP’s rival Dell’s dismal earnings and revenue reporting in the last quarter shows growing consumer and business appetite for less expensive mobile device for computing needs.

However HP can expect a better performance in fourth quarter than the third as HP has to sustain a loss of $ 8.90 billion in previous quarter due to diminishing value of its technology consulting service known as Electronic Data System which was acquired for $ 13 billion in 2008.

 According to analysis by FactSet, HP a Silicon Valley icon & one of top 30 companies in Dow Jones industrial average despite of its struggles is expected to earn $ 1.14 per share on revenue of $ 30.5 billion.
However it should be remember that in last year HP earned $ 239 million or 12 cents per share on revenue of $ 32.1 billion which would have been $ 1.17 per share earnings if certain accounting charges were not accounted.

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