The U.S. Government departments have started making fresh
investments in technology. A case in point would be a $41.0 million
deal win by
) from the State of Minnesota Department of Public Safety (DPS).
DPS signed a system-integration contract with HP Enterprise
Services to develop Driver and Vehicle Services Division's
Minnesota Licensing and Registration System.
According to the agreement, the technology company will work
with DPS to standardize the process and help to develop a system
for storing data for 6.4 million vehicle records and 4.1 million
driver history records.
The user-centric Minnesota Licensing and Registration System
(MNLARS) will enable communication among 40,000 users, including
law enforcement agencies, DVS business partners, court systems and
federal agencies to help deliver real-time access to verified data.
This process will help them to streamline the whole registration
and licensing process.
Although public and private enterprises have reduced their IT
spending budget, HP is seeing a steady flow of new business.
Although the company is winning deals at regular intervals, HP
is seeing certain internal headwinds. These include issues such as
macroeconomic concerns affecting the renewal of orders, as
companies are looking for paperless offices, so printing habits are
slowly changing having a negative impact on the printing business
of the company.
Moreover, weaker pricing in the service business coupled with
tough competition and softer-than-expected demand in the PC market
could also affect its revenues.
Recently, the company took some major restructuring initiatives
and innovative steps to manage costs, drive growth and improve the
health of its balance sheet.
On the other hand, the printer business remains particularly
challenging as competitors such as
) are regularly coming up with new products. In addition, the
growing availability of low-cost refilling options for toners and
cartridges poses a threat for HP. Also, margins in the services
business are likely to remain weak this year and the macroeconomic
trends continue to work against it.
Presently, the company holds a Zacks #3 Rank (Hold).
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