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Print 10 comment(s) - last by AndyUK.. on Sep 29 at 6:41 PM

HP releases profit estimates for fiscal 2010

The technology sector has been hard hit in 2009 with the global economic slowdown . Both corporations and consumers have been holding off on upgrading computers and spending on IT tech. HP sees that changing in 2010.

Reuters indicates that HP has unveiled its estimates for fiscal 2010 with a revenue forecast slightly below what analysts predicted from the computer giant. Despite a lower estimate than Wall Street expected, HP CEO Mark Hurd told investors on a call that HP would outperform the industry.

Hurd said, "I know we'll get questions about how fast the market's going to grow. Whatever that answer is that's handed to us in 2010, we will grow faster. We expect the IT industry to return to growth in 2010 and believe that HP will outpace the market."

HP is expecting corporate spending to resume in 2010 with companies ready to replace aging machines with newer systems. That replacement cycle for desktop and notebook computers will be fueled in part by the anticipated Windows 7 OS launching soon.

While HP is expecting spending to resume in 2010, HP CFO Cathie Lesjak doesn't expect the increase to be robust. She said, "we haven't planned for it to be really robust and we're waiting to see what really happens."

Reuters reports that HP is forecasting earnings excluding items of $4.20 to $4.30 per share on revenue of $117 billion to $118 billion for fiscal 2010. If it hits those numbers, the profit margin will be in the 11.4 to 11.6% range. Analysts were expecting HP estimates to be $4.23 in profit per share on revenues of $118.1 billion.

HP expects to grow its PC business 3 to 5% over the year and to grow its services business by 2 to 4%. HP gobbled up EDS this year in a deal worth $13 billion to become the second largest provider of tech services in the industry, behind IBM.

Analyst Ronald Gruia from Frost & Sullivan said, "The PC rebound is primarily going to be driven by strong retail notebooks, which is HP's sweet spot, and that bodes really well for them. Their services margin will continue to improve and I think they're managing the EDS integration well."



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Not I...
By bradmshannon on 9/25/2009 1:39:29 PM , Rating: 2
That spending won't be coming from my wallet, unless they accept spider webs and dust as payment.




RE: Not I...
By Souka on 9/25/2009 2:29:59 PM , Rating: 2
I've worked at two companies in past 2 years... both of which held onto their XP client systems because "vista sucks, I have it at home and I hate it." as one IT Director said.

I've chatted with their IT guys...both companies are looking to replace more than 1/2 their client systems within 1st quarter 2010, with Win7 systems.

Primary reason.... Vista "sucks" and didn't work with many of their legacy apps. Win7 however works fine...XP Mode not even needed.

I use Vista on my Sony work laptop, and Windows 7 at home. Both run great..no issues. Currently part of the Win7 beta team at my work...again, no real issues except for user training and fears to be dealt with.

Anyhow... just sharing my experience and knowledge.

:)


RE: Not I...
By Gzus666 on 9/25/2009 8:42:42 PM , Rating: 2
That is cause most IT guys are a pain in the butt and base their opinions on hearsay and 5 minutes with something. Like the idiots who won't let us setup VPN tunnels to routers we provide so we can remote administrate the network cause it is a "security risk".

Basically IT guys drive me nuts, I just had a guy that wouldn't give me access to his silly Linksys router so I could just make a static route even though I had just finished setting up the other Cisco equipment. I had to proxy work through him. I might mess up his precious default route and the static IP, scary stuff.


RE: Not I...
By Samus on 9/26/2009 5:30:14 AM , Rating: 2
I still firmly believe Vista alone caused a ton of damage to the IT sector starting in 2007. It hurt PC sales because people still wanted XP, then in 2008 people could no longer get XP and some started switching to Apples, others bought netbooks with razer thin profit margins for OEM's, and 2009, well, has been much the same as 2008.

I really hope Win7 helps PC sales, because maybe if people can get a version of Windows they actually want, sales from home's and corporations might pick up. In all honestly, there aren't many laptops in the sub-$600 market than run Vista well, it's just too much disk overhead for a laptop drive, some of which are [still] amazingly 4200RPM!


RE: Not I...
By Gzus666 on 9/26/2009 8:57:43 PM , Rating: 1
Amazing deduction based on anecdotal evidence. Reality is the economy is in the tank and people didn't spend a lot of money, especially when they were so busy laying off people. This of course usually isn't the prime time for IT spending or any major spending for that matter.


RE: Not I...
By Gyres01 on 9/28/2009 1:05:38 PM , Rating: 2
True that, in fact our company just finished upgrading the last of the windows 2000 machines to xp just last month...


By crystal clear on 9/25/2009 2:08:44 PM , Rating: 2
Very optimistic but with a note of caution-

While HP is expecting spending to resume in 2010, HP CFO Cathie Lesjak doesn't expect the increase to be robust. She said, "we haven't planned for it to be really robust and we're waiting to see what really happens."


With exception of the BRIC countries dont expect any resumption of spending.

The attitude /policy -
"if works fine then why spend/buy ..it can wait a another year".

Yes 2010 will not be as bad as 2009 but dont expect it to be good either.

All those announcements of the economy moving out of recession,technically correct but in reality the economies are still plagued with the debt crisis, job crises etc.

Unemployment is still very high & will continue to be so in 2010.

So no point building high expectation for 2010.




By ajfink on 9/26/2009 3:50:53 AM , Rating: 2
You used the word "optimistic" in your first line - and optimism is really what people want/need right now. Any increase is good at this point.


By crystal clear on 9/26/2009 11:59:04 AM , Rating: 2
oh yes indeed,back to those good old days...agree with you.

Optimism is a great feeling.


Times aren't hard....
By AndyUK on 9/29/2009 6:41:37 PM , Rating: 2
Check out what the HP board pays itself!

http://www.thestreet.com/print/story/10601820.html

"Although H-P's performance has hit the wall in the past two years, Hurd's pay -- and the pay of his management team members -- has dramatically increased. For 2008, Hurd's total compensation reached $43 million, which made him the fourth highest paid CEO in America for 2008. Hurd's total compensation increased 73% from his $25 million in 2007, even though H-P's stock price declined 29% in 2008.

On his senior management team, the sharp compensation increases in 2008 were also noteworthy. CIO Randy Mott's total compensation went up 400% last year to $28 million. Imaging EVP VJ Joshi's total compensation jumped 83% to $22 million. Personal Systems EVP Todd Bradley's total compensation jumped 263% to $21 million. Technology Solutions' EVP Ann Livermore enjoyed a 31% bump in total compensation to $21 million. And CFO Catherine Lesjak got a 49% increase in total compensation to a more modest $6 million. "

All of this whilst forcing through pay cuts on the rest of its staff!




"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch

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