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Hewlett-Packard Co. (HPQ)

  • Wed, Feb. 25, 10:14 AM
    • HP (HPQ -9.1%) has fallen towards $35 after missing FQ1 revenue estimates and offering soft FQ2/FY15 guidance.
    • Contributing to HP's woes: The company stated on the CC (transcript) it's slashing its FY15 free cash flow guidance to $3.5B-$4B from $6.5B-$7B, FQ1 free cash flow was -$73M, down from ~$700M a year ago thanks in part to forex pressures and working capital changes.
    • The IT giant also stated it respectively expects $1.3B and $500M in FY15 and FY16 charges related to its planned PC/printing spinoff, and $300M in FY15 capex related to the move. The spinoff will also result in an extra $950 of FY15 gross foreign tax payments, though about half will be offset over time by tax credits. CFO Cathie Lesjak: "The scale of this separation is unprecedented in its size and complexity."
    • Enterprise services sales (-11% Y/Y) were hurt by "key account run off and weakness in EMEA," printing (-5%) by weak Russian demand, and software (-5%, with -16% license growth) by "execution challenges and headwinds from [HP's] shift to SaaS." HP asserts it continued gaining share in PCs and storage, both of which had flat Y/Y sales growth.
    • Several firms have cut their targets, but none have downgraded yet. Printing rival Lexmark (LXK -2.6%) is following HP lower.
  • Wed, Feb. 25, 9:24 AM
  • Tue, Feb. 24, 5:39 PM
    • Top gainers, as of 5:15 p.m.: BNFT +30.0%. RUBI +13.2%. ZAGG +9.9%. NKTR +9.4%. FLTX +7.4%.
    • Top losers, as of 5:15 p.m.: SLCA -11.7%. LC -10.7%. DWA -9.1%. SAM -8.0%. HPQ -6.5%.
  • Tue, Feb. 24, 4:28 PM
    • HP (NYSE:HPQ) expects FQ2 EPS of $0.84-$0.88 (below a $0.92 consensus) and FY15 (ends Oct. '15) EPS of $3.53-$3.73 (below a $3.95 consensus). Forex is respectively expected to have a $0.09 and $0.30 impact on FQ2 and FY15 EPS (many other enterprise tech giants can relate).
    • Enterprise services revenue fell 11% Y/Y in FQ1 to $4.99B, worse than FQ4's 7% drop and contributing to the revenue miss. App/business services and IT outsourcing revenue both fell 11%.
    • Software revenue (high-margin) was also a weak spot, dropping 5% Y/Y to $871M  (worse than FQ4's -1%) to thanks to a 16% drop in license revenue (drives future services revenue) SaaS and support revenue was flat, and software services revenue down 7%.
    • Printing revenue, pressured by a long-term shift towards digital content sharing and viewing, was down 5% for the second quarter in a row, and totaled $5.54B. Hardware -4%, supplies -5%.
    • PC division revenue was flat at $8.54B, with notebook units rising 21% and desktops falling 7%. Enterprise hardware division revenue was flat at $6.98B - x86 servers +7% (improved from recent quarters), mission-critical servers -9% (also improved), networking -11% (weaker than recent quarters), storage flat, tech services -5%.
    • Helping EPS beat estimates: GAAP costs/expenses fell 5% Y/Y to $24.9B, with gross margin rising 60 bps Y/Y to 23.4%. $1.6B in buybacks also didn't hurt. HP ended FQ1 with $12.9B in cash, and $19B in debt.
    • Shares have fallen to $36.63 AH.
    • FQ1 results, PR
  • Tue, Feb. 24, 4:08 PM
    • Hewlett-Packard (NYSE:HPQ): FQ1 EPS of $0.92 beats by $0.01.
    • Revenue of $26.83B (-4.7% Y/Y) misses by $510M.
    • Shares -2.83%.
    • Press Release
  • Tue, Feb. 24, 6:17 AM
    • Deutsche Bank (NYSE:DB) will outsource large parts of its wholesale banking IT infrastructure to Hewlett-Packard (NYSE:HPQ) in a multibillion-dollar deal that is expected to significantly cut costs.
    • Under the 10-year agreement, HP will provide computing capacity and data storage to host Deutsche's operations, while the bank will retain activities such as IT architecture and information security.
    • HPQ +0.4% premarket
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  • Mon, Feb. 23, 5:35 PM
  • Thu, Feb. 19, 1:26 PM
    • Already the #2 vendor in the enterprise Ethernet switch market (behind Cisco), HP (HPQ +0.2%) is partnering with Taiwanese ODM Accton Technology and embedded Linux startup Cumulus Networks to launch a line of HP-branded white box switches (referred to as "brite-box switches") for Web-scale data centers running commodity hardware.
    • Accton will manufacture the switches, and Cumulus will supply the OS they run on. Internet giants such as Google, Facebook, and Amazon have been major adopters of cheap white-box hardware, as well as of software-defined networking (SDN) architectures that allow commodity switches to be managed and provisioned by software-based controllers. Verizon is also embracing the trend, in part by deploying Cumulus' software.
    • Cisco's (NASDAQ:CSCO) John Chambers has called white-box hardware his company's biggest long-term threat. Facebook, through its Open Compute Project, has helped lead the charge; last week, the social networking giant showed off a new 6-module switch design (can be used by any manufacturer that wants to).
    • The partnership isn't HP's first stab at taking part in the white-box boom: Last year, the company partnered with Foxconn to provide commodity servers for Web-scale data centers.
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  • Fri, Feb. 13, 11:31 AM
    • Dennis Ruhl of the JPMorgan Intrepid Value fund sees some potential bargains hatching in the slumping energy sector, and he particularly favors ConocoPhillips (NYSE:COP).
    • Ruhl says COP looks better than its energy peers from a momentum standpoint, and likes that the company was one of the first to cut capex in response to the collapse in energy prices and has done so aggressively.
    • COP trades at just 1.5x book value vs. the energy sector average of 1.8x and the S&P 500's 2.8x; the stock boasts a 4.3% dividend yield, which Ruhl believes is safe.
    • The fund manager's other four favorite value picks are ANTM, NOC, HPQ and KR.
  • Mon, Feb. 9, 7:14 PM
    • HP (NYSE:HPQ) is acquiring Voltage Security, a provider of enterprise encryption, tokenization, and encryption key management software for e-mails, documents, payments data, and other content. Terms are undisclosed.
    • Voltage's offerings will complement HP's Atalla data/payments security software. The IT giant praises the ability of Voltage's products to "allow enterprises to use protected data in applications without having to re-architect their applications or adopt fragmented frameworks" - technologies such as format-preserving encryption and stateless tokenization help - and proclaims the deal will allow it to "offer customers unparalleled data protection capabilities built to close the gaps that exist in traditional encryption and tokenization approaches."
    • Security spending has been easily outpacing broader IT spend, and that trend is expected to continue in 2015 as companies invest heavily in cybersecurity following a slew of high-profile breaches. However, fast-growing upstarts such as Palo Alto Networks, FireEye, and Fortinet have been taking share at the expense of IT giants.
  • Thu, Jan. 29, 7:46 AM
    • Hewlett-Packard (NYSE:HPQ) declares $0.16/share quarterly dividend, in line with previous.
    • Forward yield 1.72%
    • Payable April 1; for shareholders of record March 11; ex-div March 9.
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  • Tue, Jan. 27, 9:22 AM
    • After selling off yesterday in response to Seagate's guidance, Intel (NASDAQ:INTC) and HP (NYSE:HPQ) are showing steep losses in premarket trading today after Microsoft (NASDAQ:MSFT) reported 13% Y/Y drops in both its Windows OEM Pro and non-Pro revenue, and offered conservative guidance. Microsoft is down 8.3%, and Nasdaq 100 futures are off 1.4%.
    • Microsoft blamed the Windows OEM Pro decline on slowing business PC demand (following a boost driven by the end of Win. XP support), an unfavorable mix, and academic discounts. The OEM non-Pro decline was blamed on a mix shift towards cheaper hardware for which the software giant has cut or eliminated Windows licensing fees.
    • Microsoft's server/data center-related sales were healthier: Server product/services revenue rose 9%, and commercial cloud revenue (Office 365/Azure) grew 114%. But on the CC (transcript), the company stated transactional server revenue "was down primarily due to a declining traditional server market." A shift in demand towards Web/cloud data centers often relying on Linux servers might also be a factor here.
  • Mon, Jan. 26, 5:57 PM
    • As disclosed at the time of the split announcement, Meg Whitman will be the CEO of HP's (NYSE:HPQ) enterprise ops, and PC/printing EVP Dion Weisler the CEO of HP Inc.
    • Current CFO Cathie Lesjak will be the CFO of HP Enterprise, and current CTO Martin Fink its CTO. The company won't have a COO.
    • Jon Flaxman, currently the CFO of HP's PC and printing ops, will be HP Inc.'s COO. PC/printing CTO Shane Wall will be the company's CTO, inkjet & Web solutions SVP Stephen Nigro will be its printing chief, and personal systems GM Ron Coughlin will be its PC chief.
    • A "selection process is ongoing" to find a CFO, general counsel, and chief marketing officer for HP Inc., and an HR chief for HP Enterprise.
    • HP shook up its enterprise management in November to better prepare for the split.
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  • Mon, Jan. 26, 11:27 AM
    • Seagate slightly missed calendar Q4 revenue guidance and guided for calendar Q1 revenue of "at least $3.45 billion," compared with a $3.59B consensus.
    • The hard drive giant reported 4% Y/Y Q4 increase in PC drive shipments - notebooks were up, desktops were down - and a 17% increase in enterprise shipments (lifted by demand from Internet giants).
    • Intel (INTC -1.8%), HP (HPQ -3%), and NetApp (NTAP -2%) are all selling off on a day the Nasdaq is near breakeven. Intel has already guided for its PC CPU division's sales to drop by a low-single digit % in 2015, but has also forecast its server CPU division's sales will see a 15% CAGR through 2018.
    • Separately, the WSJ reports (citing an internal e-mail) HP has named a new leader for its H3C Technologies Chinese networking hardware unit, following worker protests. The paper reported in October HP wants to sell at least a 51% stake in the business, as China tries to cut its reliance on U.S. IT hardware in the wake of the 2013 NSA spying uproar.
  • Sun, Jan. 18, 12:57 PM
    • TechCrunch reports Google (NASDAQ:GOOG) is interested in acquiring Softcard, the mobile payments platform launched by AT&T (NYSE:T), Verizon (NYSE:VZ), and T-Mobile (NYSE:TMUS) in 2010 - it was previously known as Isis, before changing its name for obvious reasons. Though Softcard's owners have invested hundreds of millions in the venture, sources state Google's purchase price could be below $100M.
    • Like Apple Pay and Google Wallet, Softcard relies on NFC radios to enable transactions. And like Wallet, it has struggled to get off the ground, as U.S. consumers overwhelmingly stick with card swipes. Hard data on Apple Pay usage remains limited for now.
    • Softcard recently laid off 60 employees. Meanwhile, it was reported in 2013 that Google had spent $300M on Wallet-related acquisitions, with little to show for it. The adoption of EMV (chip-and-PIN) readers by U.S. retailers could give NFC solutions a boost, by making card payments a little less convenient.
    • The WSJ reports Google is partnering with consulting giant PwC to bid on a $2B+ contract to update the DoD's electronic health records system. PwC says Google's tools could both improve the system's security and performance, and lower costs. A group featuring IBM, HP (NYSE:HPQ), and CSC has made a rival bid.
    • Ad tech firm Marin Software (NYSE:MRIN) provides some encouraging mobile search data ahead of Google's Jan. 29 Q4 report. A Marin study found mobile accounted for 49% of Q4 U.S. search ad spend, up from 42% in Q3, and that smartphone ad click rates were 38% higher than PC rates (thanks in part to accidental clicks?). On the other hand, mobile still only accounted for 32% of conversions.
    • Medium writer Backchannel provides a deep dive into Google Search's evolution in an  era where users increasingly want search engines to know the precise meaning of their queries. Part 1 looks at Google's efforts to optimize for mobile (aided by its Knowledge Graph and Google Now). Part 2 looks at Google's real-world research into the information needs of users. Part 3 looks at Google's investments in A.I./deep learning to deliver far more intelligent search results and spontaneously surface useful information.
  • Tue, Jan. 13, 2:26 PM
    • "After significantly outperforming in 2013 and 2014, rising by 145% and more than tripling from the 2012 bottom, HPQ's 2015 should be a transitional year," writes Pac Crest, downgrading the IT giant to Sector Perform.
    • Pac Crest observes HP (HPQ -0.7%) has surpassed its $40 target - it's back below $40 today - and argues optimism about improving fundamentals is now priced in.
    • Shares currently go for 10x estimated FY15 (ends Oct. '15) EPS. The FY15 revenue growth consensus is at -1.7%.
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Company Description
Hewlett-Packard Company is a provider of products, technologies, software, solutions & services to individual consumers, small- and medium-sized businesses and large enterprises, including customers in the government, health and education sectors.