US computer giant Hewlett-Packard reported a 17-per cent fall in quarterly net profit and said it plans to cut two per cent of its workforce, or nearly 6,400 workers, over the next year.
HP said net profit fell to $1.7 billion, or 86 cents per share, in the second quarter of its fiscal year from $2.1 billion, or 87 cents per share, a year ago, in line with the expectations of Wall Street analysts.
The Palo Alto, California-based company, the world's largest manufacturer of personal computers, said revenue was down three per cent in the quarter which ended on April 30 to $27.4 billion.
Chief financial officer Cathy Lesjak announced the planned layoffs in a conference call with analysts after the release of the results.
“We will be taking some targeted action to structurally change and improve the effectiveness of our product businesses,” she said.
“These actions will result in the elimination of approximately two per cent of the HP workforce as we further streamline and simplify our organization and supply chain. These actions will be implemented over the next 12 months.”
The only bright spot for HP in the quarter was in its services business, which notched up an operating profit of $1.17 billion in the quarter due to its purchase last year of EDS. “Our services business continued to deliver strong profitability with an increased deal pipeline and the EDS integration tracking ahead of schedule,” said HP chairman and chief executive Mark Hurd.
HP said revenue from its enterprise storage and servers division fell 28 per cent to $3.5 billion while software revenue declined 15 per cent to $880 million. Computer shipments were flat in a “challenging environment” and the division saw revenue fall 19 per cent to $8.2 billion. Revenue from laptop computers was down 13 per cent while desktop computer revenue fell 24 per cent.
Operating profit for the division fell to $374 million from $544 million a year ago. The imaging and printing group saw revenue decline by 23 per cent to $5.9 billion and operating profit fall to $1.1 billion from $1.2 billion a year earlier.
HP said revenue grew nine per cent in the Americas to $12.1 billion and declined by 11 per cent in Europe, the Middle East and Africa to $10.6 billion. Revenue fell 10 per cent in Asia Pacific to $4.7 billion.
HP said it expects third quarter revenue to be flat and full fiscal year revenue to decline by four per cent to five per cent with full-year earnings per share of between $3.76 to $3.88.
Agencies
Showing posts with label EDS. Show all posts
Showing posts with label EDS. Show all posts
Friday, May 22, 2009
Wednesday, March 25, 2009
Will Infosys-Telstra deal cause job losses in India?
Bangalore-based software giant Infosys will pick up most of IBM Global Services’ multi-million dollar applications support contract with Australian software giant Telstra, after the latter’s deal with the former was scrapped following telco reducing its outsourcing partners from four to two.
According to The Australian, the decision to shift from IBM to Infosys could result in hundreds of job losses locally and in Bangalore, where IBM operates outsourcing centres.
IBM GS staff was told the scratching of the vendor’s software support would represent about 50 per cent of its one billion dollar, six-year deal with Telstra, signed in early 2006.
Telstra’s decision to drop IBM was a big surprise to IBM GS staff, who expected the contract to continue until 2012.
The deal was lost not because of performance issues but because Infosys low-balled the IBM offer, sources said.
Telstra has been reviewing its IT outsourcing contracts with Satyam, EDS, IBM GS and Infosys since last year, when the telco announced it would trim its list of major IT suppliers from four to two in an effort to reduce costs and streamline its providers.
Earlier, Telstra had ended one of its information technology outsourcing contracts with International Business Machines Corp (IBM). It has now roped in Infosys Technologies for the same.
IBM Global Services' multimillion dollar applications support contract with Telstra has been scrapped as a result of the telco reducing its outsourcing partners from four to two, as per an Australian media report.
The decision to shift from IBM to Infosys could result in hundreds of job losses locally and in Bangalore, where IBM operates outsourcing centres, the report said.
The Australian reported that IBM staff were told the scrapping of the vendor's software support would represent about 50% of its $1 billion, six-year deal with Telstra, signed in early 2006.
Less than a week ago, Telstra terminated its IT outsourcing contract with fraud-hit Satyam Computer Services. Telstra is the second major Australian company to do so after The National Australia Bank decided in February to suspend future work with the Indian outsourcer since the disgraced Indian outsourcer's accounting scandal came to light.
The IBM India spokesperson could not be reached for comment while the Infosys communication person said, "We are in our silent period and will not be able to comment on the issue."
Agencies
According to The Australian, the decision to shift from IBM to Infosys could result in hundreds of job losses locally and in Bangalore, where IBM operates outsourcing centres.
IBM GS staff was told the scratching of the vendor’s software support would represent about 50 per cent of its one billion dollar, six-year deal with Telstra, signed in early 2006.
Telstra’s decision to drop IBM was a big surprise to IBM GS staff, who expected the contract to continue until 2012.
The deal was lost not because of performance issues but because Infosys low-balled the IBM offer, sources said.
Telstra has been reviewing its IT outsourcing contracts with Satyam, EDS, IBM GS and Infosys since last year, when the telco announced it would trim its list of major IT suppliers from four to two in an effort to reduce costs and streamline its providers.
Earlier, Telstra had ended one of its information technology outsourcing contracts with International Business Machines Corp (IBM). It has now roped in Infosys Technologies for the same.
IBM Global Services' multimillion dollar applications support contract with Telstra has been scrapped as a result of the telco reducing its outsourcing partners from four to two, as per an Australian media report.
The decision to shift from IBM to Infosys could result in hundreds of job losses locally and in Bangalore, where IBM operates outsourcing centres, the report said.
The Australian reported that IBM staff were told the scrapping of the vendor's software support would represent about 50% of its $1 billion, six-year deal with Telstra, signed in early 2006.
Less than a week ago, Telstra terminated its IT outsourcing contract with fraud-hit Satyam Computer Services. Telstra is the second major Australian company to do so after The National Australia Bank decided in February to suspend future work with the Indian outsourcer since the disgraced Indian outsourcer's accounting scandal came to light.
The IBM India spokesperson could not be reached for comment while the Infosys communication person said, "We are in our silent period and will not be able to comment on the issue."
Agencies
Saturday, March 21, 2009
What is the latest buzz on Sun, IBM deal?
Whether it is mere speculation or a fact , the combination of two IT giants -- IBM and Sun Microsystems -- will surely alter the dynamics of the IT services market.
Of recent times, everybody is racing to offer hardware-software services and own data centres. We have seen that happen with Cisco s Unified Computing Systems, HP bought EDS, now IBM is looking at Sun.
There is no official comment from the two companies, but if the deal goes through it will give IBM a bigger control of the market and make it a fitting rival for HP, Dell and Microsoft.
Together, IBM and Sun would have about 65% of the market for server computers running the Unix operating system and 42% of the total server market, measured by the dollar value of the market.
Like Sun's Java and Solaris, the operating systems have gained substantial market share over the years. Similarly, Sun could give it some extra hardware market share specifically in servers.
However, reports indicate that Sun has not been doing well ever since the global recession began last September. Reports indicate that IBM may pay at least $6.5 billion in cash for the deal, which would be a 100% premium over Tuesday's closing price for Sun.
In last year's fourth quarter, IBM led in the global server market revenue with $4.9 billion in sales, about 36% of the market. HP was No. 2 with $3.9 billion in sales ie, about 29% of the market. Dell, with $1.4 billion in sales, and Sun, with about $1.3 billion, were a distant No. 3 and No. 4.
However, Sun's Solaris servers have a strong presence in the premium market, which is seen as more profitable. That is why that valuation may be justifiable for IBM.
But Sun's recent acquisition of StorageTek for $4.1 billion was termed as a hogwash, mainly because it did not go well with Sun and ended up in cold waters.
With customers like HDFC Bank, Punjab National Bank (PNB) and Tata Teleservices, Sun's strong presence in the financial services and telecom domains has been the envy of its rivals.
But in case of a merger, issues like having a number of common customers and how to merge the two global brands will come up. As a Sun employee, said, Sun employees are concerned about the future of our products if the acquisition happens, since there is a significant overlap between our products and that of IBM s.
Sun's corporate communications office terms it as a mere speculation and refused to comment on the rumour . So did the IBM communication team, saying they have no reactions from their headquarters and cannot comment on the issue.
Meanwhile, T.R. Madan Mohan, managing partner, Browne and Mohan, said that the WSJ picked up the news from the blog of a Sun employee.
According to him, the deal may not come through, but given the market cap of Sun, which is just about $ 2 billion, and IBM is supposed to have quoted $ 6.5 to $ 6.8 billion that is a very good valuation for a company that has been dithering.
Similarly, Sun's strengths are in government, BFSI and telecom. In telecom, it has some marque clients such as NTTDocomo, Dialog, Telefunken, Vodafone, etc which run mission-critical applications.
IBM has not been able to move into these accounts globally, unlike the easy entry the company had with Bharti Airtel, Aircel, Vodafone, Idea in India. By acquiring Sun, IBM will get access to these critical markets and benefit from the Java/My SQL communities.
CXOtoday
Of recent times, everybody is racing to offer hardware-software services and own data centres. We have seen that happen with Cisco s Unified Computing Systems, HP bought EDS, now IBM is looking at Sun.
There is no official comment from the two companies, but if the deal goes through it will give IBM a bigger control of the market and make it a fitting rival for HP, Dell and Microsoft.
Together, IBM and Sun would have about 65% of the market for server computers running the Unix operating system and 42% of the total server market, measured by the dollar value of the market.
Like Sun's Java and Solaris, the operating systems have gained substantial market share over the years. Similarly, Sun could give it some extra hardware market share specifically in servers.
However, reports indicate that Sun has not been doing well ever since the global recession began last September. Reports indicate that IBM may pay at least $6.5 billion in cash for the deal, which would be a 100% premium over Tuesday's closing price for Sun.
In last year's fourth quarter, IBM led in the global server market revenue with $4.9 billion in sales, about 36% of the market. HP was No. 2 with $3.9 billion in sales ie, about 29% of the market. Dell, with $1.4 billion in sales, and Sun, with about $1.3 billion, were a distant No. 3 and No. 4.
However, Sun's Solaris servers have a strong presence in the premium market, which is seen as more profitable. That is why that valuation may be justifiable for IBM.
But Sun's recent acquisition of StorageTek for $4.1 billion was termed as a hogwash, mainly because it did not go well with Sun and ended up in cold waters.
With customers like HDFC Bank, Punjab National Bank (PNB) and Tata Teleservices, Sun's strong presence in the financial services and telecom domains has been the envy of its rivals.
But in case of a merger, issues like having a number of common customers and how to merge the two global brands will come up. As a Sun employee, said, Sun employees are concerned about the future of our products if the acquisition happens, since there is a significant overlap between our products and that of IBM s.
Sun's corporate communications office terms it as a mere speculation and refused to comment on the rumour . So did the IBM communication team, saying they have no reactions from their headquarters and cannot comment on the issue.
Meanwhile, T.R. Madan Mohan, managing partner, Browne and Mohan, said that the WSJ picked up the news from the blog of a Sun employee.
According to him, the deal may not come through, but given the market cap of Sun, which is just about $ 2 billion, and IBM is supposed to have quoted $ 6.5 to $ 6.8 billion that is a very good valuation for a company that has been dithering.
Similarly, Sun's strengths are in government, BFSI and telecom. In telecom, it has some marque clients such as NTTDocomo, Dialog, Telefunken, Vodafone, etc which run mission-critical applications.
IBM has not been able to move into these accounts globally, unlike the easy entry the company had with Bharti Airtel, Aircel, Vodafone, Idea in India. By acquiring Sun, IBM will get access to these critical markets and benefit from the Java/My SQL communities.
CXOtoday
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