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News Breaks
February 21, 2013
18:05 EDTHPQHewlett-Packard: Restructuring program on track, but turnaround won't be linear
On Hewlett-Packard's (HPQ) Q1 earnings conference call, CEO Meg Whitman noted that although the company's restructuring program remained on track, the overall turnaround would not be linear. Whitman said, "Since announcing our turnaround plan we've done what we said we would do. We've defined a clear strategy for the business and we've made significant progress in bringing our costs in line with revenues. With the first quarter of 2013 behind us, we're starting to see some traction in our performance as a result of the actions we took in 2012 to lay the foundation for HP's future. HP's turnaround will not be linear, and our primary focus is to deliver on our outlook for the full year." Whitman indicated that the restructuring program had a meaningful impact on the bottom line in Q1, and she expects that will accelerate as the company moves through FY13 and into FY14. Restoring sales growth was seen as a priority. Management continued to see headwinds in BCS and the traditional storage business, but said, "we feel good about the rest of the year." They confirmed that there are no plans to break up the company, however they did expect that the Personal Systems revenue will decline year-over-year at a faster rate than it did in the first quarter. 2013 was seen as a fix and rebuild year that would set HP up for a recovery and expansion in 2014.
News For HPQ From The Last 14 Days
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February 3, 2016
11:33 EDTHPQCiti slashes PC outlook, expresses caution on related stocks
Citi significantly lowered its 2016 PC sales estimates, citing recent negative data points. In conjunction with the call, the firm lowered its estimates for three companies whose results are significantly affected by PC sales: HP Inc. (HPQ), Marvell (MRVL) and Intersil (ISIL). WHAT'S NEW: Citi analyst Jim Silva now expects PC sales to drop 6% this year, down from his previous estimate of a 2% decline. Recent data points indicate that demand for PCs has dropped significantly so far this year, while inventories are above normal, the analyst explained. Constrained budgets and macro concerns are restraining demand for PCs, Silva believes. Meanwhile, "there is not enough evidence" to conclude that the launch of Microsoft's (MSFT) Windows 10 will be a positive catalyst for PC sales this year, Silva said. Citing his view of PC trends, along with increased competition in the printer space, Silva lowered his 2016 EPS estimate for HP to $1.53 from $1.64. Statements by other printer makers, including Xerox (XRX) and Canon (CAJ), suggest that HP's margins on printers will "come under additional pressure," the analyst believes. He lowered his price target on the name to $10.75 from $14.50 and expects the stock to remain range-bound until analysts reduce their estimates further or its end markets improve. Intersil has 20% exposure to the PC market and the sales of its products related to computing are still strongly correlated with PC sales, Citi analyst Atif Malik stated. As a result, the company will face revenue headwinds throughout this year, stated the analyst. Malik, who expects the company's 2016 and 2017 EPS to come in below consensus levels, downgraded the stock to Sell from Neutral and set an $11.50 price target on the shares. Estimating Marvell's PC exposure at about 60%, Malik lowered his 2016 EPS estimate for the company to 42c from 48c and kept a Sell rating on the name. WHAT'S NOTABLE: Hedge fund Starboard Value disclosed this morning that it had bought a 6.7% activist stake in Marvell. The hedge fund said the shares are "undervalued" and The Wall Street Journal, citing sources familiar with the situation, said Starboard is betting the company can its boost margins by cutting costs, perhaps exiting its mobile device business. PRICE ACTION: In late morning trading, HP Inc. fell 3.3% to $9.55, Marvell rose 1.25% to $8.78 and Intersil dropped 4.4% to $11.93.
09:18 EDTHPQCitigroup to hold an analyst/industry conference call
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07:41 EDTHPQCiti lowers 2016 PC estimates to down 6% from down 2%
Citi analyst Jim Suva says recent data points indicate above normal PC inventories and "materially below seasonal demand" in early 2016. The analyst cut his 2016 PC estimates to down 6% from down 2%, well below IDC's estimate of down 3%. Suva believes there is a lack of evidence to suggest that Microsoft's (MSFT) Windows' 10 launch will drive a PC refresh in 2016. The analyst cut his estimates and price target for HP Inc. (HPQ) and kept a Neutral rating on the name.
06:48 EDTHPQHP Inc. esimates and price target lowered at Citi
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