News Column

HP Stock Continues to Slump

Aug 29, 2012

Steve Johnson


Hewlett-Packard's (HPQ) stock continued its dismal slide Tuesday, slumping 31 cents -- or nearly 2 percent -- to close at $16.90, its lowest point since Aug. 17, 2004.

HP's drop greatly exceeded that of the Dow Jones and S&P indexes, and the tech-heavy Nasdaq exchange posted a slight increase. The legendary Palo Alto company's shares have lost more than two-thirds of their value since April 2010, when they were priced at more than $54.

HP officials declined to comment. But Meg Whitman, who became CEO 11 months ago, has

cautioned that it will take time to turn her troubled business around.

Just last week, HP reported its biggest quarterly loss ever -- $8.9 billion. That was mostly due to writing down the value of its previous purchases of tech services provider EDS and PC-maker Compaq, as well as a $1.8 billion restructuring charge related to its plan to trim 27,000 jobs by 2014.

Although HP remains the world's biggest personal-computer seller, just ahead of Lenovo, it has struggled to adjust to the increasing consumer preference for mobile devices.

Noting that about three-fourths of the corporation's business lines "are facing long-term structural headwinds," Deutsche Bank Securities analysts concluded in a recent note to their clients

that "it will be difficult for HP to replace these declining cash flow streams with new growth businesses."

But in their own recent note, Raymond James analysts were more upbeat, calling HP "far from dead."

Source: (c)2012 the San Jose Mercury News (San Jose, Calif.). Distributed by MCT Information Services

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