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Do you buy into HP’s turnaround plan?
As Hewlett-Packard reports its fourth-quarter results, Saxo Bank's Peter Garnry says that CEO Meg Whitman's turnaround plan is on track, and as a result he is positive on HP from an investment point of view.
He says: "The turnaround case is on track they are doing the right thing by moving into software. But they are still struggling with the old business lines of PCs and printing."
HP's shares has gained almost 70 percent this year and the company says it expects 2014 be a year of "recovery and expansion".But Peter warns investors to be aware of the bumps that still lie ahead for the 74 year-old company: "There is still some pressure on free cash flow and that will be a key point for investors to look at."
He adds: "We have to keep in mind that they have negative sales growth, but they are actually defending the business quiet well, so we think that there is a good upside from here."
Whitman has improved the company's efficiency and slashing costs, with operating expenses dropping 18 percent for the first nine months of the fiscal year.She has been promoting HP's business of hosting other company's data on its servers, a service known as cloud computing.
The same quarter last year, HP posted a loss of USD 6.85 billion, or USD 3.49 per share.
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