Can Hewlett-Packard bounce back? Third quarter results are in and they don’t look good. Total revenue is down 5% year over year, and profits tanked on a $9.2 billion noncash write-down on the 2008 EDS acquisition.
What’s HP’s strategy? Meg Whitman has now been CEO of the struggling giant for a year. She compares HP’s turnaround to that of Starbucks, saying “Usually these kinds of turnarounds take anywhere between four or five years… There’s nothing fancy about these turnarounds. This is not advanced business, this is 101.”
I question if refocusing on core competencies is enough. Maybe HP needs to get into the smartphone and tablet markets. Maybe it needs to expand its services business. Think I’m wrong? Then bet your money on HP stock and get rich. HPQ trades at its lowest point in a decade and sells for an rock bottom forward P/E of 4.2.