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For HP Investors, Now Is the Time

The company also suffered some weakness in its servers, storage as well as network equipment businesses where it competes with the likes of IBM, EMC (EMC) and Cisco (CSCO) respectively. As disappointing as these revelations may be, its network division continues to be somewhat concerning since Cisco continues to show improvement in that area. On the positive side however, the company's software division soared by 18%.

However, what came as no surprise to anyone particularly since Dell (DELL) had already issued its own report, was the prolonged weakness in the company's PC division which saw a 10% decline in revenue -- lending further support that Apple, Google and Amazon are winning the battle of the mobile devices. In terms of outlook HP now expects full-year net income excluding some items to now arrive at $4.07 per share, 3 cents lower than its earlier forecast and missing analysts' average estimates by penny.

Over all, investors were not pleased with these results and have sent shares down as much as 8%. What continues to be ignored is that HP is only a year into fixing mistakes that have led to its slumping growth over the past several years, including not only failed acquisitions such as Palm and EDS, but also missing significant opportunities in the smartphone and tablets race.

What's more, with the help of its long-time partner Microsoft (MSFT), with which it shares a mutual enemy in Apple, the company is betting heavily on the success the upcoming launch of Windows 8 as a way to dispel exaggerated notions of PC deaths.

Additionally, as a way to ignite profitability while meeting goals of efficiency, the company is now in the midst of a cost-cutting strategy that should save it an estimated $3 billion over the next several years.

As early as the end of October, the company says that its headcount will be reduced by over 11,000. What it saves as a result of these reductions will be reinvested in new employee software, cloud services as well as storing some of that cash should it find ways to spur profitability.
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AMZN $536.76 1.47%
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HPQ $30.62 1.06%
IBM $160.96 -0.08%

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