You didn’t think that it was all over for Hewlett-Packard Co after the company turned in less than sparkling fiscal fourth quarter (albeit the kind of figures that the likes of Digital Equipment Corp and Unisys Corp would give any remaining teeth for) did you? I will say that we’ve refueled and tuned the engine […]
You didn’t think that it was all over for Hewlett-Packard Co after the company turned in less than sparkling fiscal fourth quarter (albeit the kind of figures that the likes of Digital Equipment Corp and Unisys Corp would give any remaining teeth for) did you? I will say that we’ve refueled and tuned the engine of growth and profitability, chief executive Lewis Platt reportedly told analysts at a closed meeting late Wednesday. While providing no projections on the computer group’s performance in the fiscal year that began last month, Platt said the company had demonstrated its ability to hold back expenses when required, as it did in its recent fourth quarter. We will continue to be a fierce competitor in an intensely-competitive marketplace, Platt said. We like to win and we’ll do what it takes to continue being a winner. One of the cleverer tricks Hewlett-Packard has pulled has been to keep profits as well as growth coming as its mix of products moves steadily in favor of low-margin mass market products such as laser and inkjet printers, the newest of which still seem astonishingly cheap to those that lived through the dot matrix, band printer and daisywheel generations. Favorable trends in the sector include scanning, making multiple copies directly from the desktop across a network, and the use of de facto distributed computing in the printing locally Web pages that have been retrieved from the Internet. And once again, analysts told Reuter, Platt stressed that cost management remains a priority in every sector. He said new initiatives take place within an environment of disciplined restraint on hiring and expense control. As the fourth quarter’s significant slowdown in expense growth would indicate, when we have asked HP people to put on the brakes, they exercise commendable restraint, he declared.
Needs to start worrying
Platt said HP had made managing its supply chain a priority and has begun to see pay-offs as just about every business has some re-engineering effort in place. While the workstation business has been weak, analysts said the company has been moving to get applications shifted over to its new products and appeared to be moving the business in a positive direction, despite market weakness. The company also insisted that the move to 64-bit systems will begin in 1997 so that the transition to the 64-bit Merced microprocessor it is jointly developing with Intel Corp for the end of the decade will not require a move to new software. The personal computer line-up is also strong, analysts said, with products ranging from the hand-held Windows CE devices introduced last month to four-way symmetric multi-processing Pentium Pro servers. And the company is still scrambling past stodgier rivals – in the first three quarters of calendar 1996, sales of personal computers leaped 55% in a market that grew by only 18%. And, given that Hewlett now has two thirds of the US inkjet and three quarters of the US desktop laser printer markets, that means that just about every personal computer company bar Compaq Computer Corp needs to start worrying about HP. Separately, Dick Watts, vice-president and general manager the Computer Systems Organization, said Unix sales were on track after the lead month of the company’s first fiscal quarter of its 1997 financial year. We did have a strong finish in workstations, he said of the pick-up in workstation sales in October, after weakness in August and September. He saw no clear encroachment of Windows NT onto high-end Unix sales.