Zeev's Turnips Patch-No Politics (ZEEV)

[Lane Hall-Witt]

limtex--

The erumpent reaction to HPQ is bizarre, to say the least. They're making good money in their Printer business, as expected. But they're losing money in PCs and Enterprise and also lost over $100 million in Financing (largely due to bad loans in Latin America). Looking forward, HPQ certainly didn't say things are getting worse; but they're expecting corporate IT spending to remain weak, and they projected a weak holiday bounce. They beat consensus sales numbers last quarter largely because they lowballed their guidance, with so much uncertainty surrounding the integration of HWP and CPQ. Next quarter, earnings optimism stems principally from cost-cutting, including an extra 1,000 in headcount reductions that they had not built into their original integration plan.

It looks like HPQ is executing well, and I for one am extremely surprised by that because I've always thought of Carly Fiorina more as a spinmeister than an operations hawk. I'm glad they're doing well, because I've long liked the story of Hewlett and Packard and because I've known some good people at the company. But I didn't hear anything from them that should lead to this market-wide euphoria.