HP, NetApp Earnings: It’s Not How Much You Make, but How You Use It
Hewlett-Packard and NetApp both released their earnings reports and though results are moving in opposite directions for each respective company, things appear to be on the positive end for both tech firms.
HP’s revenue was short of analysts’ estimates at $27.6 billion for its fiscal year Q2 2013, but its stocks went up 13 percent and the company expects its earnings for the third quarter to land somewhere between 84 and 87 cents per, higher than Wall Street’s 83 cents a share estimates.
It was also noted that CEO Meg Whitman’s restructuring plans seems to be well received by investors.
Joining this morning’s Live NewsDesk Show with Kristin Feledy is Wikibon Chief Analyst Dave Vellante for his Breaking Analysis on the earnings report of the two companies and what he sees in their future.
“HP’s got to shrink to grow. It’s really not a growth story yet and in my view, in order to grow, it’s got to do two things: one is to figure out how to get its organic inventions out of HP labs and into the pipelines but it’s also got to make better acquisitions and do a better job of acquiring companies and integrating them into the massive HP engine. Both leveraging its supply chain and user channel.
“And because of its debt, it’s been handcuffed in its ability to do that and that’s a concern but I think Meg’s doing the right thing. She’s rapidly paying down the debts so that they can make 2014 a growth story,” Vellante stated.
As for NetApp, it posted its fiscal Q4 2013 and full year results with revenues of $6.3 billion for the year, up by two percent annually. Though revenue increased, some see NetApp’s growth stagnating and could be indicative of a slowdown in the overall storage business.
NetApp is also tapping into its cash stockpile and restructuring its payout to investors, to deflect interest from its Q4 stagnation.
“What NetApp has to do is address the complexities of managing in their distributed systems and it really has to focus on automation,” Vellante stated. He also added that NetApp needs to better leverage Ontap so it can better automate.
For more of Vellante’s Breaking Analysis, check out the NewsDesk video below:
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