This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

H-P's Vulnerabilities Starting to Show

SAN FRANCISCO -- Hewlett-Packard (HPQ - Get Report) has been an island of calm and stability during the past year's economic turmoil.

But ominous clouds are drifting over the tech giant's sanctuary.

Get your daily dose of Jim Cramer and all the stocks in his head. Sign up for the free Daily Booyah! newsletter by clicking here.

The strong overseas demand that allowed H-P to skirt the U.S. slowdown looks less reliable every day, while the favorable currency exchange rates that juiced H-P's revenue are fading.

Cramer: Look Past the Quarter on H-P

And soft spots are appearing in certain corners of H-P's business: U.S. PC shipments grew a modest 5.6% in the second calendar quarter at H-P, compared to Dell's (DELL - Get Report) 11.9% growth and Apple's (AAPL - Get Report) 38% growth, according to industry research firm Gartner.

How this all plays out in H-P's income statement will become clear when the company reports its quarterly earnings after Tuesday's market close.

H-P has consistently delivered the goods for Wall Street in the era of CEO Mark Hurd, who has rejuvenated the Palo Alto, Calif., company less through bold strategic bets than through obsessively shaving costs and fine-tuning everyday business operations.

Yet even that staid game plan seems to be changing with H-P's $13.9 billion bid for technology services firm EDS (EDS) in May -- a deal that would represent H-P's largest acquisition in years.

That deal -- which has yet to close -- has caused nervousness among shareholders who wonder whether the two companies are a good fit.

Shares of H-P are up about 8% since their most recent bottom in July, finishing Friday's regular session at $45.59, well below the 52-week high of $53.48.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
DELL $0.00 0.00%
AAPL $128.70 -0.19%
EDS $1.57 1.95%
HPQ $33.65 -0.44%
FB $78.81 -0.23%

Markets

DOW 18,070.40 +46.34 0.26%
S&P 500 2,114.49 +6.20 0.29%
NASDAQ 5,016.9290 +11.5380 0.23%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs