HP going strong
After displacing Dell Inc. as the world’s No. 1 computer manufacturer last year, technology giant Hewlett-Packard narrowed the gap behind Dell in U.S. market leadership in the first quarter of this year, according to the Gartner Group.
It has an especially strong position in emerging markets that are poised for explosive growth.
The aggressive firm also is making a push into the high-end color-copier market with ink-based machines costing $19,000 and up. In addition, it recently won a seven-year contract from NASA to provide as much as $5.6 billion of server computers, printers and other equipment.
Shares of Hewlett-Packard are up 10 percent this year, following gains of 44 percent last year and 36 percent in 2005. Since Hurd joined the company two years ago, the share price has more than doubled.
HP sales grew 27 percent in its most recent quarter on cost-cutting and strength in its PC and printer businesses. Earnings, however, declined 7 percent because of restructuring costs and a tax settlement that boosted the year-earlier quarter. The consensus rating on HP stock is a “buy,” according to Thomson Financial.
HP earnings are expected to increase 25 percent in its fiscal year ending in October and 12 percent next fiscal year. The five-year annualized growth rate is projected at 14 percent, compared to the 15 percent forecast for the diversified computer-systems industry.
In a last vestige of the company’s boardroom spying scandal, the Securities and Exchange Commission recently found that HP violated mandatory disclosure rules in how it announced Tom Perkins’ May 2006 board resignation. But the settlement requires only that the company not violate SEC reporting requirements in the future.
