A Turnaround at HP?

I’m not particularly impressed with Hewlett-Packard’s earnings. The company earned 36 cents a share last quarter, five cents more than expectations.

The company’s personal computer division, which had lost money in the not-so-distant past, earned $163 million in the third quarter – “despite the fact that this is our seasonally weakest quarter,” Mr. Hurd said. The company reported a profit margin of 2.6 percent in its personal computer division, its best in years.

That’s still not too good. Some on the Street seem impressed that HP’s earnings grew five times faster than its sales. Yes, that’s true, but only because the company has undertaken dramatic cost-cutting measures. Do you ever notice that Dell never announces a “major cost-cutting initiative”? It’s because they’re always looking out for ways to keep costs down.

HP still has a long way to go. Dell is the best PC-maker in the business.

Posted by on August 17th, 2005 at 7:03 pm


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