HP Reports #s: Hurd Atop Agenda
Amid a major corporate restructuring, Hewlett-Packard shares jumped to an 18-month high on Tuesday as the technology giant posted better-than-expected results due to a resurgence in its personal computer unit.H-P topped earnings targets for its fiscal 3rd quarter and raised earnings estimates for the 4th quarter.
Higher-margin notebooks accounted for the improved performance in its PC group.
As for H-P's main profit center -- its printing/ imaging unit -- the impact of a price war resulted in sales to consumers dropping almost 20%.
Thank you, Dell.
"I'm encouraged by what we have achieved to date, and we are focused on driving further performance improvements," said CEO Mark Hurd.
And therein lies the beauty: Hurd is delivering results faster than anyone expected.
HP's board ousted CEO Carly Fiorina in February and hired Hurd in March.
The new chief executive almost immediately started undoing his predecessor's changes while pursuing his own reorganization agenda.
So far, Hurd has cut 14,500 jobs, overhauled HP's retirement plan, and even found time to ink a deal with Apple.
Catablast! Media Group has a buy recommendation on HPQ as our team is confident Hurd will continue to shed costs, aggressively price its products, and possibly spin off the company's cash-cow printing unit.
We're also enticed by its valuation: While ROA and margins have ebbed over the last 5 years, HP still trades at a discount to its industry average P/E multiple.
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