StockCall Review on Hewlett-Packard and International Business Machines: The Shift from PCs to Mobile

Thu Jan 31, 2013 8:01am EST

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StockCall Review on Hewlett-Packard and International Business Machines: The Shift from
PCs to Mobile

LONDON, January 31, 2013 /PRNewswire/ --

    The shift to mobile computing in the last two years has hurt personal computer
makers such as Hewlett-Packard Company (NYSE : HPQ) and Dell Inc. Both companies have
been forced to rethink their strategy. As Hewlett-Packard and Dell look to transform
their businesses, shares of both companies have taken a beating even as shares of other
major technology companies such as International Business Machines Corp. (NYSE : IBM)
have performed well in the last two years. StockCall analysts have completed a full
technical research on Hewlett-Packard and International Business Machines. These free
reports can be accessed upon registration at http://www.stockcall.com/register  

    Shift to Mobile  

    With more and more users shifting to mobile computing, demand for PCs and laptop has
taken a hit. Weak global economic environment also had an impact on PC makers. The
outlook for PC makers looks even more uncertain, with tablet sales expected to continue
to rise. In such a scenario, PC makers such as Hewlett-Packard have been forced to
rethink their strategy. Sign up today to download our free report on
http://www.StockCall.com/HPQ013113.pdf  

    Hewlett-Packard's Turnaround Strategy  

    Back in October last year, Hewlett-Packard, at an annual Securities Analyst Meeting,
outlined its turnaround strategy. CEO Meg Whitman highlighted the progress made by the
company since late 2011 to stabilize the business and lay foundation for a multi-year
turnaround.  

    Whitman said that by 2016, she expects Hewlett-Packard's revenue to grow in-line
with the GDP. HP's Printing and Personal Systems, which has been the worst affected by
the shift to mobile, is making changes to better understand and anticipate customer
needs and deliver better products and solutions that leverage the entire HP portfolio.  

    Hewlett-Packard also launched the HP ElitePad 900, a tablet designed specifically
for businesses. The company is also re-investing in mobility with a dedicated leadership
team. Although HP is making efforts to offset the weakness in the PC market with its
turnaround strategy, it will take some time before the company can start growing again. 


    Q1 Results Eyed  

    Investors are waiting for Hewlett-Packard's first quarter results, which will be
released next month, to check how the company has been progressing since implementing
its turnaround strategy.  

    In the fourth quarter of fiscal 2012, the company reported net revenue of $30
billion, down 7% on a year-over-year basis. Its Personal Systems revenue for the quarter
fell 14%. Both Desktops and Netbooks units fell 12% in the quarter, thus highlighting
the weakness in the PC market.  

    For the upcoming quarter, the Palo Alto, California-based company expects non-GAAP
diluted earnings per share to be between $0.68 and $0.71.  

    IBM as an Example  

    As Hewlett-Packard continues to struggle due to the changing market dynamics, the
company can look to International Business Machines Corp. [Free Report on IBM
[http://www.stockcall.com/IBM013113.pdf ]] [1] as an example. Over the years, IBM has
successfully transformed itself into an information technology services company.  

    Last week, IBM reported strong fourth quarter results with net income of $5.8
billion, up 6%. On a yearly basis, profits were up 5% to $16.6 billion. Other key
revenue data for the full year were an 80% surge in its cloud computing revenue and a
13% increase in its business analytics revenue. Ginni Rometty, Chairman, President and
CEO of IBM, stated that the company's performance in the fourth quarter and for the full
year was driven by its strategic growth initiatives---growth markets, analytics, cloud
computing, Smarter Planet solutions---which support the company's continued shift to
higher-value businesses.  

    Looking ahead, IBM plans to continue to invest in delivering innovations for the
enterprise in critical areas such as big data, mobile solutions, social businesses and
security.  

    Footer:  

        
        1) International Business Machines Corp. Technical Analysis [
          http://www.StockCall.com/InternationalBusinessMachinesCorp013113.pdf ]


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