HP comfortably beat Wall Street's estimates in its second quarter last month, boosted by better-than-expected performance in Enterprise Services and Printing, as well as savings from restructuring and improved operations.
Marshall, however, warned that investors should not get too carried away, despite Whitman's progress. "In our view, HPQ has been making solid progress on its "fix and rebuild" process this year but a return to top-line growth and margin expansion next year will prove more difficult as higher-value segments (e.g., software and services) continue to face competitive pressure and PCs/Printing are secularly challenged."
During the second quarter, for example, revenue from HP's Personal Systems Group declined 20% from the prior year's quarter, underlining the challenges posed by PC market.
Marshall maintained his "neutral" rating on HP.--Written by James Rogers in New York. Follow @jamesjrogers >To submit a news tip, send an email to: email@example.com.