H-P, AHRC Renew IT Services Deal - Analyst Blog

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Hewlett-Packard Co. 's ( HPQ ) Enterprise Services unit received two task orders from the U.S. Army Human Resources Command (AHRC) for an undisclosed sum. The task orders require H-P to continue providing information technology (IT) services to improve the agency's recruitment procedure and overall departmental operations in a cost-effective manner. The U.S. agency has been assigned the task of managing careers of potential army soldiers.

Under the first task order, H-P will continue to manage IT infrastructure for AHRC with the help of its data center services for another three years. H-P has been providing this support since past 20 years. The data center service includes support for hardware (PCs, laptops and printers), networking, enterprise architecture and help desk. The new task order would also require H-P to extend its services for the U.S. Army Cadet Command and Army Recruiting Command, in addition to AHRC.

Under the second task order, H-P will help AHRC in hiring/recruiting personnel through its Applications Services. With this service, AHRC can manage applications from prospective candidates and select suitable candidates for the job. The service also allows AHRC to simplify the process of online applications.

Last week, H-P's Enterprise Services unit was chosen by the U.S. Department of Homeland Security Department to provide call-center support for its U.S. Citizenship and Immigration Services ('USCIS') arm. The 5-year task order was valued at $220.5 million.

Though deal wins under the Enterprise Services unit is pretty frequent, the segment's financial performances are not encouraging. In the recently concluded first quarter 2013, the segment registered a year over year revenue decline of 7.0%. But during the call, H-P mentioned that it will continue to focus on strategic enterprise services business, which includes cloud, application modernization, security and information management, and analytics. We find H-P's commentary encouraging and believe that the continuous deal wins will lead to better growth prospects for the segment.

Though further indication of PC market slump in 2013, declining revenues and competition from Dell Inc. ( DELL ) are concerns, back-to-back product launches and growing exposure into enterprise storage space are encouraging.

Currently, H-P has a Zacks Rank #2 (Buy). Other technology stocks that warrant consideration are Symantec Corp. ( SYMC ) and Synopsys Inc. ( SNPS ).



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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 The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: DELL , HPQ , IT , SNPS , SYMC

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