A small victory? The pundits yesterday morning were really down on HP (yup, even more than usual) -- profits will be down 50%, revenues down 8%, sixth straight disastrous direction. Unstated but clearly implied -- can the team running this ship ever get it right?
And then, a surprising outcome. Profit, while down, was only down 16%, not 50%. Revenue, while down, wasn only down 5.6% not quite a free fall.
And the startling conclusion to the article -- HP stock is UP 43%, an astounding 43%, in the past 3 months. It rose 6.4% for the day. Hummn....
Maybe some benchmarks are worth considering.
Dell -- with a proposed private buyout -- three days ago announced revenues down 11% year over year, and profits off 31%.
And VeriFone (remember when HP bought them?) announced yesterday that their profits were about half of street expectations, and the market crushed them, sending the stock price down 43% in an hour.
So, HP did better than its PC rival, altho with commercial PCs down 4% and consumer systems down 13%, it is obvious (see Intel and Microsoft results also) that the tablet world is ending PC dominance. Oddly, HP's desktop units were up 10%, while notebooks were down 14%. Total PC biz down 7.7%
More concerning to erstwhile shareholders, though, should be the weakness across the board. Printing revenues were down 5.3% -- okay, so the Cloud is winning, and printer cartridges are going the way of Fuji and Kodak film. But the BIG FUTURE BETS are Enterprise Group, Enterprise Serviees, and Software. How'd they fare?
Enterprise group -- this is the head-to-head hardware server business with IBM, and now Oracle and Cisco among others -- is DOWN 4.1% What? This is the core strength of tomorrow, according to some. Doesn't look that favorable to me. And Intel's big 64 bit chips -- the Itanium line -- show it too.
Enterprise services -- this is the merged group with EDS, the one that Carly wanted to bet on, the one that showed the most promise under Ann Livermore, that Hurd bought EDS and gutted the leadership morale -- indeed, the one that Gerstner bet on for IBM rejuvenation -- is DOWN 7.1%. This is an unmitigated disaster. This should be the report card of the day; no one expects PCs and printers to reach higher glory, but consulting services is THE BET. What happened?
And software? This stepchild (recall HP sold VeriFone, got 'blindsided' by Autonomy, and bought Mercury Interactive which had a cloudy ethical history charitably stated), and otherwise has parlayed close to $30 billion in acquisitions into $8 billion sales. Revenues this quarter? DOWN 2.1%
It'd be fun to speculate on just why the stock price is up 43% in three months. Is it simply that folk have figured out that this $115B company isn't going to disappear as soon as we thought, and a $30B market cap might be relatively safe? Or have people tired of owning Apple (down that same 43% number that seems to go with each company unless you're in 'privatizing' talks)?