Looks as though the rumor of Hewlett-Packard's
A long way to go
Well, it's a step in the right direction, but it may not be enough. On an annual basis, the company claims it would be able to save about $3 billion to $3.5 billion by 2014. It plans to use these savings to conduct research and development in cloud computing, data, and security.
But in my opinion, competing with the likes of IBM
HP's quarterly revenue fell about 3% from the prior year period to $30.7 billion. Net income took a much larger haircut of 31% to $1.59 billion. Though both numbers came in higher than what analysts at Thomson Reuters expected, HP's third-quarter earnings forecast fell short of analyst estimates.
The fall in revenue was mainly due to weakness in the company's imaging and printing division, which saw a 10% decline due to weak demand. But this decline was in part offset by HP's software division, which saw a remarkable 22% growth from last year thanks to a big software-as-a-service testing deal the company managed to sign up in Europe. However, Autonomy, the company it bought last year, came out with some disappointing numbers, and HP accordingly made a change in the division's leadership.
All companies in the PC industry have been taking a hit, thanks to the cannibalizing effect tablets have had, especially from Apple
But like rival Dell, HP is also planning to unveil tablets running on Microsoft's
Keep it simple
But besides being a victim of the invasion of tablets, HPs sheer size seems to be another problem. With huge operational dimensions come the negative characteristics of sluggish decision-making, bureaucracy, and duplication of roles and effort. To her credit, Meg Whitman is on the case, trying to simplify HP's organizational structure starting with her decision of merging the company's personal-systems group with its printing and imaging division.
The Foolish bottom line
HP had a rather tumultuous 2011, in which we saw its overpriced $11.7 billion acquisition of Autonomy as well as the unceremonious firing of then CEO Leo Apotheker. Today, the company seems to be going in the right direction under Whitman's leadership. Even though HP is showing some signs of getting better, I'd still remain cautious and wait on the sidelines for now.
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