Analysts at Stifel opined that the third-quarter earnings results and fiscal 2013 guidance of Hewlett-Packard Company (NYSE:HPQ) is not surprising, but they believe that the focal point of the financial report is the company’s FCF generation and Project Moonshot.
Hewlett-Packard Company (HPQ) rated hold
Stifel recommended a hold rating for shares of Hewlett-Packard Company (NYSE:HPQ). The stock closed at $25.38 per share, down by almost 2% on Wednesday.
Baupost's investment process involves "never-ending" gleaning of facts to help support investment ideas Seth Klarman writes in his end-of-year letter to investors. In the letter, a copy of which ValueWalk has been able to review, the value investor describes the Baupost Group's process to identify ideas and answer the most critical questions about its potential Read More
In addition, the analysts also wanted to know more about the new role of David Donatelli, who served as EVP and general manager of Enterprise Group. Donatelli will now focus on identifying early stage technologies.
Bill Veghte, chief operating officer of Hewlett-Packard Company (NYSE:HPQ), assumed leadership of the Enterprise Group. The company also said its chief marketing officer, Marty Homlish, will assume a new position which will combine the operations of its marketing and communications divisions. Henry Gomez, current chief of the communications division, will also perform the role of chief marketing officer.
Hewlett-Packard Company (NYSE:HPQ) reported $27.226 billion in revenue, a decline of 8.2% year-over-year. The result is higher than the $26.86 billion estimate of Stifel analysts, Aaron Rakers, Joseph Quatruchi, and Adrew Shinn. However, it is slightly lower than the consensus revenue estimate at $27.28 billion
The company’s Non-GAAP earnings were $0.86 per share, in line with the estimate of the research firm’s analysts and the consensus estimate of Wall Street analysts.
According to Rakers and his colleagues the most notable part of Hewlett-Packard Company (NYSE:HPQ)’s financial report is the performance of its Personal Systems Group (PSG), which generated $7.7 billion revenue, higher than their estimate at $7.4 billion. The segment’s EBIT margin was 3%. According to the analysts, the company’s PC revenue fell by 11% year-over-year during the quarter.
Hewlett-Packard Company (NYSE:HPQ) posted $4.612 billion in revenue from Enterprise Servers, Storage and Networking segment, $2.174 billion revenue from Technology Services, $982 million revenue from Software, $5.803 billion revenue from Printing segment, and $5.843 billion revenue from Enterprise Services.
The company ended the quarter with $13.251 billion total cash and investments or a net debt of $11.49 billion. The analysts emphasized that Hewlett-Packard Company (NYSE:HPQ) has a multi-year target to return to a net neutral cash position including financing debt. Its free cash flow (FCF) during the period was $1.79 billion. The analysts noted that the company increased its FCF target for fiscal 2013 to $7.5 billion in the previous quarter.