Hewlett Packard & Analysts: Who Is in Charge?

Stock Tickers: HPQ, DELL, SYMC

I am not questioning who is running Hewlett-Packard (HPQ) at all.  That is quite clear, and we all know it is effectively Hurdlett-Packard.

What is not clear is the uncanny reiterations being seen at the Analyst meeting today.  In a webcast, Mark Hurd reiterated 2008 targets of $2.78 to $2.98 and revenues of $100.9 Billion to $102.8 Billion.  If you can guess what consensus is, you are the same as the street: Consensus for 2008 is $2.88 and $102 Billion respectively.  The company also reiterated prior 2007 targets already given, but this was the first real formal number targets for 2008.

It is uncanny how often the "consensus" numbers from Wall Street analysts are essentially acting as a tool that companies use to bogey their guidance.  HPQ has its fiscal end in October, so this is really only a 2-year target.  But you still have to wonder whose crystal ball is right and whose crystal ball is the one dictating guidance.  What you can expect is that this essentially should lock down chances of any huge estimate changes up or down from the street after this analyst meeting.

The company did say it would continue to evaluate cost cutting opportunities.  It is still looking for opportunities as well.  The company also made a small acquisition, and the company was dismissing recent rumors that it could be interested in a large acquisition like Symantec (SYMC) or other large pure-play security or storage companies because the CEO noted you shouldn’t expect huge transactions.  H-P also announced that it was acquiring private Knightsbridge Solutions for undisclosed terms.  Knightsbridge is another information management company in business intelligence and data warehousing & integration.

Shares of Dell (DELL) are down 0.5% at $26.60 this morning, but that is after more reports of the lagging ex-PC sales leader cutting monitor panel orders by as much as 30%.

Shares of HPQ are up 0.2% at $40.10 in pre-market activity.  Symantec (SYMC) has not seen any pre-market trading activity after HPQ effectively dismissed the rumors of a potential deal.

Jon C.Ogg
December 11, 2006