StockCall Review on Hewlett-Packard and International Business Machines: The
Shift from PCs to Mobile
LONDON, January 31, 2013
LONDON, January 31, 2013 /PRNewswire/ --
The shift to mobile computing in the last two years has hurt personal computer
makers such as Hewlett-Packard Company (NYSE: HPQ) and Dell Inc. Both
companies have been forced to rethink their strategy. As Hewlett-Packard and
Dell look to transform their businesses, shares of both companies have taken a
beating even as shares of other major technology companies such as
International Business Machines Corp. (NYSE: IBM) have performed well in the
last two years. StockCall analysts have completed a full technical research on
Hewlett-Packard and International Business Machines. These free reports can be
accessed upon registration at http://www.stockcall.com/register
Shift to Mobile
With more and more users shifting to mobile computing, demand for PCs and
laptop has taken a hit. Weak global economic environment also had an impact on
PC makers. The outlook for PC makers looks even more uncertain, with tablet
sales expected to continue to rise. In such a scenario, PC makers such as
Hewlett-Packard have been forced to rethink their strategy. Sign up today to
download our free report on http://www.StockCall.com/HPQ013113.pdf
Hewlett-Packard's Turnaround Strategy
Back in October last year, Hewlett-Packard, at an annual Securities Analyst
Meeting, outlined its turnaround strategy. CEO Meg Whitman highlighted the
progress made by the company since late 2011 to stabilize the business and lay
foundation for a multi-year turnaround.
Whitman said that by 2016, she expects Hewlett-Packard's revenue to grow
in-line with the GDP. HP's Printing and Personal Systems, which has been the
worst affected by the shift to mobile, is making changes to better understand
and anticipate customer needs and deliver better products and solutions that
leverage the entire HP portfolio.
Hewlett-Packard also launched the HP ElitePad 900, a tablet designed
specifically for businesses. The company is also re-investing in mobility with
a dedicated leadership team. Although HP is making efforts to offset the
weakness in the PC market with its turnaround strategy, it will take some time
before the company can start growing again.
Q1 Results Eyed
Investors are waiting for Hewlett-Packard's first quarter results, which will
be released next month, to check how the company has been progressing since
implementing its turnaround strategy.
In the fourth quarter of fiscal 2012, the company reported net revenue of $30
billion, down 7% on a year-over-year basis. Its Personal Systems revenue for
the quarter fell 14%. Both Desktops and Netbooks units fell 12% in the
quarter, thus highlighting the weakness in the PC market.
For the upcoming quarter, the Palo Alto, California-based company expects
non-GAAP diluted earnings per share to be between $0.68 and $0.71.
IBM as an Example
As Hewlett-Packard continues to struggle due to the changing market dynamics,
the company can look to International Business Machines Corp. [ Free Report on
IBM ] ^[ ^1 ^] as an example. Over the years, IBM has successfully transformed
itself into an information technology services company.
Last week, IBM reported strong fourth quarter results with net income of $5.8
billion, up 6%. On a yearly basis, profits were up 5% to $16.6 billion. Other
key revenue data for the full year were an 80% surge in its cloud computing
revenue and a 13% increase in its business analytics revenue. Ginni Rometty,
Chairman, President and CEO of IBM, stated that the company's performance in
the fourth quarter and for the full year was driven by its strategic growth
initiatives---growth markets, analytics, cloud computing, Smarter Planet
solutions---which support the company's continued shift to higher-value
Looking ahead, IBM plans to continue to invest in delivering innovations for
the enterprise in critical areas such as big data, mobile solutions, social
businesses and security.
1.International Business Machines Corp. Technical Analysis [
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