Tomahawk, WI 8/20/2013 (Basicsmedia) – Hewlett-Packard Company (NYSE:HPQ) is a well known brand in the world of technologies, IT products, software and system solutions. HP has come a long way from the days when it was mostly known for manufacturing photocopiers and printers. It has now branched into other sectors to produce goods and services which are critical for companies, and major institutions all over the world. The challenge it faces right now is to remain profitable and reward its investors for investing in its stock. Can it do that after posting severe losses in 2012?


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HPQ Sales to Be Affected by declining PC sales

The losses which HPQ reported for FY 2012, are related to the major acquisitions the company embarked on in 2011 as well as 2012. In a 52-week period, its stock attracted a high of $30.00, as well as a low of $11.35. It is not only the acquisitions which the company embarked on which were responsible for the not so impressive financial results. The company appears to be struggling to report profits or performing better than analysts estimate. This is closely related with the company’s inability to keep up with the massive changes in the technology industry.

HPQ became a household name for the PCs it manufactured. But a careful examination of this industry will show that PC sales are on a decline. Things are no longer like they used to be only a few years ago. Every company which has been a market leader in the past, has struggled with making such changes. Some have transitioned well, while others have closed shop after clearly demonstrating that they are unable to adapt to the new environment. The situation may not change any time soon, unless there is a radical shift in strategy by HPQ top executives.

HPQ Focus on Reorganization May Affect Its Financial Performance

At the moment, when I look at what HPQ is doing, all I can sense is that it is more focused on reorganization. If this was to go on, and it is rightly expected since the company has made a lot of acquisitions in 2011 and 2012, hence the need to put its house in order, I can’t expect it to post the sort of profits and revenue which will create a positive buzz. HPQ’s decision to make new acquisitions is understandable since this is one way in which it can gain a better foothold in the market, and keep up with some of the developments and changes taking place in the industry.

After a close analysis of Hewlett-Packard Company, I’ve come to the conclusion that it is perhaps not the best option for investors with a short term interest. Unless you are prepared to exercise a lot of patience with HPQ, and give it time to turn the situation around, then it would be ideal to invest elsewhere. However, anyone with the patience to wait for the company to put its house in order is likely to reap major benefits in terms of dividends and return on investment. The technological industry is one with huge potentials, which HPQ will to the maximum.

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