Cloud Computing: Hewlett-Packard Earnings – Is This the Start of the Turnaround?
May 17, 2014
Grazed from Fool. Author:
With tech behemoth Hewlett-Packard (NYSE: HPQ ) announcing its results for the fiscal second quarter on May 21, the company’s greatest problem continues to be its inability to develop a secure, alternate source of revenue that can help offset its dependence on the rapidly shrinking PC industry. While CEO Meg Whitman deserves a pat on the back for finally putting the brakes on the company’s continued revenue slide, HP’s return to profitability still seems like an elusive dream to a majority of investors.
One of the highlights of the company’s performance during the recent first quarter was the poor performance of two of its main operating divisions, enterprise computing and printing, that together account for around 40% of its overall revenue generated…
HP’s enterprise division posted revenue that stayed largely flat on a year-over-year basis, but the real cause for concern was a slight fall in its operating margin, a sign of lowered profitability going forward. Things were further complicated by the emergence of Chinese tech giant Lenovo as a powerful near-term competitor, following its deal with industry rival IBM (NYSE: IBM ) to acquire the latter’s low-end server business. HP’s printing division, the other major contributor to its operating profit, went on to record a 2.2% year-over-year drop in revenues during the quarter…
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