Hewlett-Packard Company (NYSE:HPQ) will announce its third quarter results on August 21,which many believe will be more focused on declining PC sales, like always. However, it might be interesting to pay more attention to HP’s server, software, cloud and Autonomy businesses, which can be comfortably positioned as an alternative to the hardware business like HP Chromebook and Android tablets.
PC companies changing strategies to counter the slump in demand
PC demands, as we all know, have been on the decline for the past year or so, and Windows 8 weak popularity has not done any good for demand. Dell Inc. (NASDAQ:DELL) has been adopting the strategy of bringing down the price of PCs to gain more market share while Lenovo is capitalizing on non-PC devices.
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What is the future of Hewlett-Packard Company (NYSE:HPQ) in the PC market, and can the new CEO Meg Whitman deliver some significant ups in PC revenue and profits?
Options available to Hewlett-Packard Company
International Business Machines Corp. (NYSE:IBM), a rival to Hewlett Packard Company (NYSE:HPQ), has laid off some of its hardware employees and may even sell off its x86 server business. How HP is working to overcome competition from cloud computing will be worth getting an answer during the earnings call.
A second segment worth watching is Hewlett-Packard Company (NYSE:HPQ)’s software business which has seen some rough patches due to its Autonomy acquisition. However, CEO Whitman has given some hints during previous earning calls that Autonomy is heading towards a stable condition. Another matter of interest here is whether HP is in a position to grow eDiscovery, big data and information protection business.
HP cloud performance is another area of interest where the company has not really performed out of the box. However, its public cloud is making efforts to expand against competition from Amazon.com, Inc. (NASDAQ:AMZN) web services, Windows Azure, Rackspace and others. Public cloud buildouts from Dell have been stopped and Big Blue has not made any significant changes other than acquiring Soft Layer.
Items to watch for
Performance and future plans for 3D printers will also be closely watched. Hewlett-Packard Company (NYSE:HPQ) will also need to address in its earning call how it plans to generate revenue from these business sectors.
The sales performance of hardware devices like HP Chromebooks and HP Android tablets, and how much the company expects from them in the future are also some vital questions that need to be addressed.
In the previous four earning calls, Whitman talked about her turnaround plan, and it is high time that these efforts convert into some results.