Dian L. Chu, Economic Forecasts & Opinions
I listened to the HP earning`s call, and it was really solid. It appears that HP is integrating the EDS and Palm acquisitions quite well, and will start to gain some upside margin growth in many of their business lines as they start to recognize the synergies of these new acquisitions.
HP currently is probably the most undervalued company in the Dow 30. This is all because of an outstanding CEO resigned due to policy violations. But listening to the call, and I would recommend anyone interested in the HP stock to do, it is obvious that Mark Hurd left HP in quite capable hands.
The thing that struck me regarding the call is how different the 4th quarter and 2011 future guidance and commentary regarding future growth in their business segments differs dramatically from John Chambers' at Cisco. Mr. Chambers basically threw all of tech under the bus because they missed their quarter, and were quite worried about their future 4th quarter guidance.
It seems obvious that Mr. Chambers' “sector warning” looks more like a Cisco specific issue, instead of reflecting the entire tech outlook, and corporate spending for the 4th quarter and into 2011. After all, Intel blew away their numbers with their highest margins ever, while HP also had an excellent quarter.
Furthermore, HP’s guidance although conservative, suggests that they are well positioned to beat again in the 4th quarter. It is apparent from the call that many of HP’s business segments are actually more than likely to have upside surprises for the 4th quarter. Of course, the appointment of a new chief yesterday would only help to solidify the executive leadership.
So, this is my take from HP’s conference call last night….if you are still doom and gloom about HP`s future.
Dian L. Chu, Aug. 20, 2010