Hewlett-Packard Wins $548M DoD Contract - Analyst Blog


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Hewlett-Packard Company ( HPQ ) has yet again managed to clinch a new deal. The Enterprise Service division of Hewlett-Packard announced that it has been awarded a task order by the Defense Manpower Data Center (DMDC) of the U.S. Department of Defense.

The DMDC contract spans over five years and is valued at $548.0 million. Per the contract, Hewlett-Packard's Enterprise services will manage and enhance DMDC's mission-critical hardware and software services globally.

The company will also provide its commercial off-the-shelf (COTS) hardware services to support the complex IT environments. Moreover, Hewlett-Packard's Enterprise services will provide software services such as - Defense Biometric Identification Systems (DBIDS), Real-Time Automated Personnel Identification System (RAPIDS), and Noncombatant Tracking/Emergency Tracking Accountability System (NT/ETAS) to boost DMDC's Personnel Security and Assurance systems

These hardware and software systems provide personnel security management that reduces business risk. This will help DMDC to reduce costs and manage and procure data in a fast and effective manner.

Hewlett-Packard's IT services are being deployed by several public sector departments. Market research firm Gartner Inc. ( IT ) expects spending on technology to reach $3.8 trillion in 2014, up 3.1% from the year-ago quarter. We believe this will significantly add to Hewlett-Packard's top line.

Additionally, the company's traction in the cloud, security and big data segments are positives, going forward. The company's strategic focus on the software business will help it to achieve long-term profitability.

We believe that Hewlett-Packard's launch of new phablets in India will boost its mobile solutions portfolio and act as a tailwind for the company's near-term financial performance.

However, continuing macroeconomic challenges and competition from International Business Machines ( IBM ) and Oracle ( ORCL ) are the headwinds, going forward.

Currently, Hewlett-Packard has a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: HPQ , IBM , IT , ORCL

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