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 Hewlett-Packard. Show all posts
Showing posts with label Hewlett-Packard. Show all posts
Friday, May 22, 2009
Monday, May 4, 2009
Dell-Acer is attractive merger, feel analyst
The personal computer industry may be ripe for a wave of consolidation, with a marriage of Dell Inc and Acer Inc seen as a particularly smart deal, according to an influential Wall Street analyst.
"Among the 10 top PC vendors, we believe that a Dell/Acer combination makes the most sense," Sanford C. Bernstein & Co analyst Toni Sacconaghi said in a client note on Friday.
If Dell were to buy Acer for a 20 percent premium, or about $5.7 billion, it would boost Dell's annual revenue growth sharply and add 12 cents a share to annual profit, he said.
The PC industry is commoditized and remains fragmented. Consolidating could help companies score better pricing from component vendors and contract manufacturers, as well as cost savings in areas such as human resources, he said.
"We view PC vendors as analogous to retailers, where our research suggests that the largest and operationally most efficient have garnered outsized profits relative to their peers," Sacconaghi wrote in his report.
Acer has a strong share of the portable computer market outside the United States, which would provide Dell with exposure to faster growth markets, he added.
Sacconaghi said buying Acer might also be beneficial to top PC maker Hewlett-Packard Co, but not as much as it would to Dell.
"While an HP-Acer combination might provide similar scale and synergy benefits, end market complementarity would not be as high," he said.
According to research firm Gartner, Dell and Acer were in a virtual tie for second place in the first quarter in market share in the United States.
Agencies
"Among the 10 top PC vendors, we believe that a Dell/Acer combination makes the most sense," Sanford C. Bernstein & Co analyst Toni Sacconaghi said in a client note on Friday.
If Dell were to buy Acer for a 20 percent premium, or about $5.7 billion, it would boost Dell's annual revenue growth sharply and add 12 cents a share to annual profit, he said.
The PC industry is commoditized and remains fragmented. Consolidating could help companies score better pricing from component vendors and contract manufacturers, as well as cost savings in areas such as human resources, he said.
"We view PC vendors as analogous to retailers, where our research suggests that the largest and operationally most efficient have garnered outsized profits relative to their peers," Sacconaghi wrote in his report.
Acer has a strong share of the portable computer market outside the United States, which would provide Dell with exposure to faster growth markets, he added.
Sacconaghi said buying Acer might also be beneficial to top PC maker Hewlett-Packard Co, but not as much as it would to Dell.
"While an HP-Acer combination might provide similar scale and synergy benefits, end market complementarity would not be as high," he said.
According to research firm Gartner, Dell and Acer were in a virtual tie for second place in the first quarter in market share in the United States.
Agencies
Tuesday, April 21, 2009
Is HP top PC maker in US?
Global shipments of personal computers fell 7.1 percent in the first three months of the year, but the decline was smaller than expected and research group IDC on Wednesday said the industry could turn around by the end of the year.
A second research group, Gartner Inc, calculated first-quarter PC shipments fell 6.5 percent from the same period in 2008. The two groups use different methods to track PC shipments.
IDC had predicted worldwide shipments would fall 8.2 percent in the quarter. The US market was also much stronger than IDC forecast, with PC shipments falling 3.1 percent from a year ago, compared with an expected 8.9 percent drop. By Gartner's count, US shipments dipped less than one percent.
"Based on the U..being the center of the financial crisis, and looking at trends of last recession, we were concerned that demand and growth would continue to decline," said Loren Loverde, an IDC program director.
Instead, the US PC market, which took a beating in the fourth quarter, benefited from intense price competition among PC makers as well as the growing demand for netbooks, or small, cheap, low-powered laptops.
Both groups reported that Hewlett-Packard Co used the trend to overtake Dell Inc as the top PC maker in the US HP's lower prices and more established brand among shoppers helped push its market share to 27.6 percent. Dell's share fell to 26.3 percent as it struggled to reorganize its consumer business, according to IDC.
Taiwan's Acer Inc, the No 3 PC maker in the US and a force in the netbook market, snagged 10.5 percent of the market. Apple Inc's share edged up to 7.6 percent, and Japan-based Toshiba Corp, the fifth-largest, took 6.6 percent.
Worldwide, HP's market share crept up to 20.5 percent while Dell's slipped a few points to 13.6 percent, IDC reported. HP's shipments rose 2.9 percent as Dell's plunged 16.7 percent.
No 3 Acer captured 11.6 percent of PC shipments worldwide. China's Lenovo Group's share was flat at 7 percent, and Toshiba's share edged up to 5.4 percent.
Chipmaker Intel Corp. on Tuesday said personal computer sales "bottomed out" in the first quarter. Neither IDC nor Gartner wanted to match Intel's bold assessment, but IDC took a more optimistic stance.
"I don't think Intel's comment was meant to say we're going to come roaring back next quarter," Loverde said. "It's likely we won't see growth deteriorate from here."
Before the release of Wednesday's numbers, IDC had forecast an 8.4 percent decline in the second quarter and a 4.5 percent drop in the third before seeing growth in the fourth quarter.
George Shiffler, research director at Gartner, said in a statement that retailers may be restocking inventory, but "this restocking should not be interpreted as a recovery in PC end-user demand. It's still unclear if the global PC market has hit the bottom."
Agencies
A second research group, Gartner Inc, calculated first-quarter PC shipments fell 6.5 percent from the same period in 2008. The two groups use different methods to track PC shipments.
IDC had predicted worldwide shipments would fall 8.2 percent in the quarter. The US market was also much stronger than IDC forecast, with PC shipments falling 3.1 percent from a year ago, compared with an expected 8.9 percent drop. By Gartner's count, US shipments dipped less than one percent.
"Based on the U..being the center of the financial crisis, and looking at trends of last recession, we were concerned that demand and growth would continue to decline," said Loren Loverde, an IDC program director.
Instead, the US PC market, which took a beating in the fourth quarter, benefited from intense price competition among PC makers as well as the growing demand for netbooks, or small, cheap, low-powered laptops.
Both groups reported that Hewlett-Packard Co used the trend to overtake Dell Inc as the top PC maker in the US HP's lower prices and more established brand among shoppers helped push its market share to 27.6 percent. Dell's share fell to 26.3 percent as it struggled to reorganize its consumer business, according to IDC.
Taiwan's Acer Inc, the No 3 PC maker in the US and a force in the netbook market, snagged 10.5 percent of the market. Apple Inc's share edged up to 7.6 percent, and Japan-based Toshiba Corp, the fifth-largest, took 6.6 percent.
Worldwide, HP's market share crept up to 20.5 percent while Dell's slipped a few points to 13.6 percent, IDC reported. HP's shipments rose 2.9 percent as Dell's plunged 16.7 percent.
No 3 Acer captured 11.6 percent of PC shipments worldwide. China's Lenovo Group's share was flat at 7 percent, and Toshiba's share edged up to 5.4 percent.
Chipmaker Intel Corp. on Tuesday said personal computer sales "bottomed out" in the first quarter. Neither IDC nor Gartner wanted to match Intel's bold assessment, but IDC took a more optimistic stance.
"I don't think Intel's comment was meant to say we're going to come roaring back next quarter," Loverde said. "It's likely we won't see growth deteriorate from here."
Before the release of Wednesday's numbers, IDC had forecast an 8.4 percent decline in the second quarter and a 4.5 percent drop in the third before seeing growth in the fourth quarter.
George Shiffler, research director at Gartner, said in a statement that retailers may be restocking inventory, but "this restocking should not be interpreted as a recovery in PC end-user demand. It's still unclear if the global PC market has hit the bottom."
Agencies
Wednesday, March 18, 2009
Is IBM in talks to buy Sun Microsystems?
International Business Machines is in talks to acquire Sun Microsystems, the Wall Street Journal said, citing people familiar with the matter.
IBM is likely to pay at least $6.5 billion in cash to acquire Sun, the people told the paper.
That would translate into a premium of about 100 per cent over Sun's closing price on Tuesday of $4.97 a share on the Nasdaq, the paper said.
In recent months, Sun has approached a number of large tech companies in the hopes of being acquired, the paper said. Hewlett-Packard Co declined the offer, the paper said.
Sun is a maker of software and high-end computers. A spokesman for IBM declined to comment to the paper on questions about any talks with Sun. IBM and Sun could not be immediately be reached for comments.
Agencies
IBM is likely to pay at least $6.5 billion in cash to acquire Sun, the people told the paper.
That would translate into a premium of about 100 per cent over Sun's closing price on Tuesday of $4.97 a share on the Nasdaq, the paper said.
In recent months, Sun has approached a number of large tech companies in the hopes of being acquired, the paper said. Hewlett-Packard Co declined the offer, the paper said.
Sun is a maker of software and high-end computers. A spokesman for IBM declined to comment to the paper on questions about any talks with Sun. IBM and Sun could not be immediately be reached for comments.
Agencies
Thursday, February 26, 2009
Is Nokia likely to enter laptop industry?
The world's top cellphone maker Nokia is eyeing entering the laptop business, its Chief Executive Olli-Pekka Kallasvuo said in an interview to Finnish national broadcaster YLE on Wednesday.
"We are looking very actively also at this opportunity," Kallasvuo said, when asked whether Nokia plans to make laptops.
Industry has rumoured about Nokia's possible plan to enter the PC industry since late last year, but Kallasvuo's comment was the first official admittance of such plans.
"We don't have to look even for five years from now to see that what we know as a cellphone and what we know as a PC are in many ways converging," Kallasvuo said.
"Today we have hundreds of millions of people who are having their first Internet experience on the phone. This is a good indication," he said.
Nokia's comments come a week after No 3 PC brand Acer launched a foray into the phone business with eight cellphone models, joining leader Hewlett-Packard and No. 4 Lenovo in the high-growth space.
While strong profit margins in the smartphone industry attract PC brands, the attraction of the low-margin computer industry is less obvious.
"Nokia maybe nervous about entering a market segment that is already heavily commoditised, but it would be in a position to exploit its enormous scale in manufacturing, supply chain and distribution," said Ben Wood, research director at CCS Insight.
"All leading mobile network operators and retailers are adding connected notebooks and netbooks to their portfolios alongside mobile phones. On this basis it comes as no surprise that Nokia is evaluating this segment," he said.
The global PC industry was resilient for most of last year when other technology sectors were ailing, but it too has now been caught up in the deepening economic downturn that has hit demand from consumers and corporate buyers.
Agencies
"We are looking very actively also at this opportunity," Kallasvuo said, when asked whether Nokia plans to make laptops.
Industry has rumoured about Nokia's possible plan to enter the PC industry since late last year, but Kallasvuo's comment was the first official admittance of such plans.
"We don't have to look even for five years from now to see that what we know as a cellphone and what we know as a PC are in many ways converging," Kallasvuo said.
"Today we have hundreds of millions of people who are having their first Internet experience on the phone. This is a good indication," he said.
Nokia's comments come a week after No 3 PC brand Acer launched a foray into the phone business with eight cellphone models, joining leader Hewlett-Packard and No. 4 Lenovo in the high-growth space.
While strong profit margins in the smartphone industry attract PC brands, the attraction of the low-margin computer industry is less obvious.
"Nokia maybe nervous about entering a market segment that is already heavily commoditised, but it would be in a position to exploit its enormous scale in manufacturing, supply chain and distribution," said Ben Wood, research director at CCS Insight.
"All leading mobile network operators and retailers are adding connected notebooks and netbooks to their portfolios alongside mobile phones. On this basis it comes as no surprise that Nokia is evaluating this segment," he said.
The global PC industry was resilient for most of last year when other technology sectors were ailing, but it too has now been caught up in the deepening economic downturn that has hit demand from consumers and corporate buyers.
Agencies
Thursday, January 8, 2009
Is Dell likely to cut 1,900 jobs from Ireland?
Dell Inc, the world's No. 2 PC maker, will cut about 1,900 of 3,000 jobs at its manufacturing plant in Limerick in the west of Ireland, Dell said on Thursday.
Dell, which ranks itself as Ireland's largest exporter, largest technology company and second largest company overall, said it would move production of computer systems for customers in Europe, the Middle East and Africa to its Polish plant and third-party manufacturing partners.
Dell cut more than 8,000 jobs last year and struggled to regain market share it lost to larger rival Hewlett-Packard Co. It also said last year it would outsource more manufacturing to cut costs.
Agencies
Dell, which ranks itself as Ireland's largest exporter, largest technology company and second largest company overall, said it would move production of computer systems for customers in Europe, the Middle East and Africa to its Polish plant and third-party manufacturing partners.
Dell cut more than 8,000 jobs last year and struggled to regain market share it lost to larger rival Hewlett-Packard Co. It also said last year it would outsource more manufacturing to cut costs.
Agencies
Saturday, December 6, 2008
No raise for Hewlett-Packard employees
If you are a Hewlett-Packard employee, you don’t have a raise coming your way. According to an internal memo, the company plans to use the funds meant for raises and bonuses to fund pension plans and other benefits. Interestingly, the memo also indicates that the upper management has nothing to worry.
Employees have been notified by e-mail that they won’t receive a salary increase in fiscal 2009, which began in November. The world’s largest personal-computer maker is freezing salaries as part of Chief Executive Officer Mark Hurd’s efforts to contain costs. The company has already gone ahead and cut jobs, closed offices and merged data centers to lift profit. It is also limiting travel, curtailing hiring and eliminating “favorite science projects” to save on research costs in 2009, Chief Financial Officer Cathie Lesjak said last month on a conference call.
Hewlett-Packard, which has 320,000 employees, declined to confirm the salary freeze. “In this difficult macroeconomic environment, we believe it is prudent and responsible to reduce costs where possible,” said spokeswoman Emma McCulloch. “HP has a longstanding and disciplined approach to managing costs in order to invest in the company’s growth.”
Hewlett-Packard, based in Palo Alto, California, the shares have dropped 34 per cent this year.
Hurd, who became CEO in 2005, received $25.3 million in total compensation in fiscal 2007.
Source: Economic Times
Employees have been notified by e-mail that they won’t receive a salary increase in fiscal 2009, which began in November. The world’s largest personal-computer maker is freezing salaries as part of Chief Executive Officer Mark Hurd’s efforts to contain costs. The company has already gone ahead and cut jobs, closed offices and merged data centers to lift profit. It is also limiting travel, curtailing hiring and eliminating “favorite science projects” to save on research costs in 2009, Chief Financial Officer Cathie Lesjak said last month on a conference call.
Hewlett-Packard, which has 320,000 employees, declined to confirm the salary freeze. “In this difficult macroeconomic environment, we believe it is prudent and responsible to reduce costs where possible,” said spokeswoman Emma McCulloch. “HP has a longstanding and disciplined approach to managing costs in order to invest in the company’s growth.”
Hewlett-Packard, based in Palo Alto, California, the shares have dropped 34 per cent this year.
Hurd, who became CEO in 2005, received $25.3 million in total compensation in fiscal 2007.
Source: Economic Times
No raise for Hewlett-Packard employees
If you are a Hewlett-Packard employee, you don’t have a raise coming your way. According to an internal memo, the company plans to use the funds meant for raises and bonuses to fund pension plans and other benefits. Interestingly, the memo also indicates that the upper management has nothing to worry.
Employees have been notified by e-mail that they won’t receive a salary increase in fiscal 2009, which began in November. The world’s largest personal-computer maker is freezing salaries as part of Chief Executive Officer Mark Hurd’s efforts to contain costs. The company has already gone ahead and cut jobs, closed offices and merged data centers to lift profit. It is also limiting travel, curtailing hiring and eliminating “favorite science projects” to save on research costs in 2009, Chief Financial Officer Cathie Lesjak said last month on a conference call.
Hewlett-Packard, which has 320,000 employees, declined to confirm the salary freeze. “In this difficult macroeconomic environment, we believe it is prudent and responsible to reduce costs where possible,” said spokeswoman Emma McCulloch. “HP has a longstanding and disciplined approach to managing costs in order to invest in the company’s growth.”
Hewlett-Packard, based in Palo Alto, California, the shares have dropped 34 per cent this year.
Hurd, who became CEO in 2005, received $25.3 million in total compensation in fiscal 2007.
Source: Economic Times
Employees have been notified by e-mail that they won’t receive a salary increase in fiscal 2009, which began in November. The world’s largest personal-computer maker is freezing salaries as part of Chief Executive Officer Mark Hurd’s efforts to contain costs. The company has already gone ahead and cut jobs, closed offices and merged data centers to lift profit. It is also limiting travel, curtailing hiring and eliminating “favorite science projects” to save on research costs in 2009, Chief Financial Officer Cathie Lesjak said last month on a conference call.
Hewlett-Packard, which has 320,000 employees, declined to confirm the salary freeze. “In this difficult macroeconomic environment, we believe it is prudent and responsible to reduce costs where possible,” said spokeswoman Emma McCulloch. “HP has a longstanding and disciplined approach to managing costs in order to invest in the company’s growth.”
Hewlett-Packard, based in Palo Alto, California, the shares have dropped 34 per cent this year.
Hurd, who became CEO in 2005, received $25.3 million in total compensation in fiscal 2007.
Source: Economic Times
Friday, December 5, 2008
Recession times, HP freezes on pay hike!
Hewlett-Packard, the world’s largest personal-computer maker, is freezing salaries as part of chief executive officer Mark Hurd’s efforts to contain costs, people familiar with the plan said.
Employees have been notified by e-mail that they won’t receive a salary increase in fiscal 2009, which began in November, according to two people who asked not be identified because the message was confidential. The only exceptions will be in countries where pay freezes are illegal, the two people said.
Hurd has cut jobs, closed offices and merged data centers to lift profit, even as he expands through acquisitions. Hewlett-Packard also is limiting travel, curtailing hiring and eliminating favorite science projects to save on research costs in 2009, chief financial officer Cathie Lesjak said last month on a conference call. Hewlett-Packard, which has 3,20,000 employees, declined to confirm the salary freeze.
In this difficult macroeconomic environment, we believe it is prudent and responsible to reduce costs where possible, said spokeswoman Emma McCulloch. HP has a longstanding and disciplined approach to managing costs in order to invest in the company’s growth.
Hurd, who became CEO in 2005, received $25.3 million in total compensation in fiscal 2007. Worldwide technology spending growth will slow to 2.6% next year, less than half the rate initially predicted, research firm IDC said last month. Growth in the US will decelerate to 0.9%, the Framingham, Massachusetts-based company estimated.
Hewlett-Packard’s PC sales, which account for about a third of revenue, rose 10% to $11.2 billion last quarter, beating some estimates. Demand for notebooks offset declining printer sales in a shrinking economy. Last month, Hurd forecast a rise in profit to as much as $4.03 a share this fiscal year, more than the $3.89 anticipated by analysts in a Bloomberg survey. Investors took that as a sign the company is prepared to squeeze more profit out of sales as customers reduce spending.
It will be a challenging environment and were planning on such, Hurd, 51, said on a November 23 conference call with reporters. We can only control the things we can control, which is our cost structure and the competitiveness of our products.
Also in India
A HP employee in Bangalore said that employees in India too had received a mail from the company saying there wouldn’t be any salary increase in fiscal 2009. Salary increases in India’s technology sector have been amongst the highest in the world in the past few years. If HP does not hike salaries in fiscal 2009, this would be the first time in many years that a major technology company in India would be avoiding a salary increment.
Source: Agencies
Employees have been notified by e-mail that they won’t receive a salary increase in fiscal 2009, which began in November, according to two people who asked not be identified because the message was confidential. The only exceptions will be in countries where pay freezes are illegal, the two people said.
Hurd has cut jobs, closed offices and merged data centers to lift profit, even as he expands through acquisitions. Hewlett-Packard also is limiting travel, curtailing hiring and eliminating favorite science projects to save on research costs in 2009, chief financial officer Cathie Lesjak said last month on a conference call. Hewlett-Packard, which has 3,20,000 employees, declined to confirm the salary freeze.
In this difficult macroeconomic environment, we believe it is prudent and responsible to reduce costs where possible, said spokeswoman Emma McCulloch. HP has a longstanding and disciplined approach to managing costs in order to invest in the company’s growth.
Hurd, who became CEO in 2005, received $25.3 million in total compensation in fiscal 2007. Worldwide technology spending growth will slow to 2.6% next year, less than half the rate initially predicted, research firm IDC said last month. Growth in the US will decelerate to 0.9%, the Framingham, Massachusetts-based company estimated.
Hewlett-Packard’s PC sales, which account for about a third of revenue, rose 10% to $11.2 billion last quarter, beating some estimates. Demand for notebooks offset declining printer sales in a shrinking economy. Last month, Hurd forecast a rise in profit to as much as $4.03 a share this fiscal year, more than the $3.89 anticipated by analysts in a Bloomberg survey. Investors took that as a sign the company is prepared to squeeze more profit out of sales as customers reduce spending.
It will be a challenging environment and were planning on such, Hurd, 51, said on a November 23 conference call with reporters. We can only control the things we can control, which is our cost structure and the competitiveness of our products.
Also in India
A HP employee in Bangalore said that employees in India too had received a mail from the company saying there wouldn’t be any salary increase in fiscal 2009. Salary increases in India’s technology sector have been amongst the highest in the world in the past few years. If HP does not hike salaries in fiscal 2009, this would be the first time in many years that a major technology company in India would be avoiding a salary increment.
Source: Agencies
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