Canaccord Genuity Morning Coffee on Hewlett-Packard (HPQ): EDS – Best Acquisition Since Compaq
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Price: $29.71 +0.81%
Rating Summary:
12 Buy, 23 Hold, 6 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
12 Buy, 23 Hold, 6 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Canaccord Genuity Morning Coffee on Hewlett-Packard (NYSE: HPQ): EDS – Best acquisition since Compaq.
As Investor’s Business Daily noted, Mr. Market doesn’t appear to be buying into the Hewlett-Packard restructuring story. The leading PC maker had a day to forget after reporting mixed results for its third quarter that were hampered by a restructuring effort marked by $10.8 billion in previously announced write-downs. For the quarter ended July 31, H-P’s profit was $1 a share, down 9% from $1.10 in the year-earlier quarter, thanks to an $8 billion write-down for Electronic Data Systems, a technology services company it acquired for $13.9 billion in 2008. Revenue, meanwhile, fell 5% to $29.7 billion; analysts had expected $30.1 billion. During a conference call with analysts, CEO Meg Whitman said the company is the early stages of a turnaround and faces several challenges in the next few years. One analyst noted, “While we do expect margins and earnings per share to benefit from the $3 billion of restructuring savings in fiscal year 2013 it remains unclear to us how the company intends to stabilize its revenue line and how much those savings will be reinvested versus flowed to the bottom line.”
As Investor’s Business Daily noted, Mr. Market doesn’t appear to be buying into the Hewlett-Packard restructuring story. The leading PC maker had a day to forget after reporting mixed results for its third quarter that were hampered by a restructuring effort marked by $10.8 billion in previously announced write-downs. For the quarter ended July 31, H-P’s profit was $1 a share, down 9% from $1.10 in the year-earlier quarter, thanks to an $8 billion write-down for Electronic Data Systems, a technology services company it acquired for $13.9 billion in 2008. Revenue, meanwhile, fell 5% to $29.7 billion; analysts had expected $30.1 billion. During a conference call with analysts, CEO Meg Whitman said the company is the early stages of a turnaround and faces several challenges in the next few years. One analyst noted, “While we do expect margins and earnings per share to benefit from the $3 billion of restructuring savings in fiscal year 2013 it remains unclear to us how the company intends to stabilize its revenue line and how much those savings will be reinvested versus flowed to the bottom line.”
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