Hewlett-Packard Company (NYSE:HPQ) turningaround, Dell Inc (NASDAQ:DELL)
Post Hewlett-Packard Company (NYSE:HPQ)’s quarterly earnings report, it’s been around three weeks since the company’s shares got a 17% boost and these gains have clung-on despite very few raised hands from the analyst bunch. What’s really got investors excited is the company’s free cash flow. To be more explicit, several financial metrics have showed marked signs of sustainable improvement in them. HPQ managed to chop the time that it took to actually turn its resources into sold products. This means that its money didn’t get tied up for the duration that it had, in the past.
A gamut of benefits
In the post-results discussions, Meg Whitman, the Chief Executive Officer, told investment analysts that the company’s achievements were a result of its concerted efforts towards a long-term strategy, rather than just a one-off achievement. For investors, that’s definitely good news as they would like to see the company generate cash that would be sufficient to feed its dividend, buy-back shares, pay down its debt and also invest in innovation.
Hewlett-Packard Company (NYSE:HPQ) still faces the humungous challenge of hunting for growth when most consumers are showing lessened interest in its primary product lines like PC’s and printers. As a matter of fact, last quarter, there was a decline in all HP product lines, although not all of them are in diminishing product markets. HP hopes that those dipping PC-related revenues can be replaced by building on its non-PC divisions such as servers and cloud computing.
Dell trying to bell the elusive cat
HP is not the only company that is shifting its weight. After returning as Dell Inc (NASDAQ:DELL) ‘s Chief Executive Officer in 2007, Michael Dell has been in efforts to metamorphose the company from a computer-maker into a service and an enterprise IT solutions provider. On June 5th, in a surprise move, the special committee that had been set up to decide on the fate of the company decided to back Michael Dell’s offer.
Irrespective of who drives these two rival companies, the fact remains that they both will have to face up to the challenges and the opportunities that the market and their investors present them with.