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Thursday, February 19, 2009

HP cuts full year outlook - Rueters


SAN FRANCISCO (Reuters) - Hewlett-Packard Co (HPQ.N) cut its full-year profit outlook after quarterly revenue missed expectations on weak sales of printers, personal computers and servers, sending its shares down 3 percent.

While HP's diversified business lines -- which also include computer services and software -- have kept it relatively resilient to the economic downturn, it is still vulnerable to sharp cutbacks in corporate spending on technology.

"The big disappointment, not surprisingly, is the shortfall in revenue," said Pacific Crest Securities analyst Brent Bracelin. "Their hardware businesses, both servers and storage, are under intense scrutiny. Budgets are being cut and that showed up in the shortfall today."

For fiscal 2009, HP on Wednesday forecast profit excluding items of $3.76 to $3.88 a share, on a revenue decline of 2 to 5 percent from $118.4 billion in fiscal 2008. That compared with its previous forecast for earnings per share of $3.88 to $4.03 on revenue of $127.5 billion to $130 billion.

Wall Street analysts, on average, had expected earnings of $3.78 a share on revenue of $126.6 billion.

"They are vulnerable to weakening PC sales," said Shebly Seyrafi, analyst at Calyon Securities. "Shares are down on a combination of the actual results, the revenue mess and the lowering of the annual guidance. There are lots of reasons to be concerned about Hewlett-Packard."

The technology bellwether said net profit for its fiscal first quarter ended January 31 fell to $1.85 billion, or 75 cents a share, from $2.13 billion, or 80 cents a share, in the year-ago period.

Excluding items, HP earned 93 cents a share, matching average analyst estimates, according to Reuters Estimates. Analysts pointed to tight cost controls.

"A laser focus on cost-control has benefited HP despite a dramatic falloff in revenues and I don't think the outlook is as bad as it could have been given currency headwinds and overall weak demand environment," said Bill Kreher, analyst at Edward Jones.

HP said fiscal first-quarter revenue rose 1 percent to $28.8 billion, below the $31.9 billion Wall Street estimate.

For the current quarter, HP expects a profit of 84 cents to 86 cents a share from continuing operations, on a revenue decline of 2 to 3 percent from a year ago. That compares with the average Wall Street forecast for earnings of 90 cents a share on revenue of $31 billion.

The company is the world's No. 1 PC maker, with a market share of nearly 20 percent in the 2008 fourth quarter, according to IDC.

Last year, HP acquired Electronic Data Systems Corp in a $13.2 billion deal, making HP the second largest technology services company behind International Business Machines Corp (IBM.N).

Shares of HP, a Dow component, are down around 20 percent from a year ago. The stock fell to $32.93 in extended trading from its New York Stock Exchange close of $34.08.

(Reporting by Gabriel Madway; editing by Richard Chang)



Wednesday, February 18, 2009

Managed Print Services - Today's Lightning In a Bottle


"MPS has had its false starts over the last 8 years or so..."

"I have over 100 salespeople, who typically take orders. I can't get them to sell MPS..."

"The owner of my company really doesn't understand what it takes and how long it takes..."

"This is a lot to digest..."

"It's like trying to drink from a fire hose..."

These statements are just some of the "off-line" comments I heard while attending the Synnex, Managed Print Services, "Windows of Opportunity" seminar.

I was very happy to attend the Synnex/PrintSolv sales training seminar held in "Surf City", Huntington Beach, California.

Point of interest: the venue was spectacular - right on the beach, across the PCH (Pacific Coast Highway). With the waves thundering, and a cold breeze whipping in, it was nice to be near the ocean once again.

About 60 or so people attended - and Steven Power, the ex-copier sales guy and current sales trainer extraordinaire conducted the two-day event.

I had attended one of Steven's sales training classes years ago in New York and remembered him to be a strong advocate for Value Add and a staunch opponent of Transaction-based sales.

Contact Me

Greg Walters, Incorporated
greg@grwalters.com
262.370.4193