HP in 09 - Stable Profits and Pushing Digital
As many of the major tech players in and outside they valley see their profits slide (Intel currently at 14.18, Yahoo at 12.34, Dell at 10.65), HP’s share price has stabilized over the past month. Although earnings are modest, HP has positioned itself to fair better in the downturn over the next year than many of their competitors. With regard to PC manufacturing, HP relies on contract manufacturers. This is a big plus since it does not have to pay workers to keep the plants running when demand is down. Also, 60% of HP’s profits come from abroad, another big plus if the US market continues to slide. Over the past four years, HP’s new CEO Mark Hurd has been focused on on financial health of HP.
![[HP CPU and printer]](http://s.wsj.net/public/resources/images/BA-AO261A_hp_pa_NS_20081226211749.jpg) |
Less than a decade ago, HP was almost solely dependent on printer-ink supplies. Since Hurd’s arrival in 2005, each of the business units has grown more profitable, giving the company financial balance and stability. Over the past four fiscal years, revenue has grown to $118.4 billion from $80 billion, while earnings per share have more than doubled. This emphasis on profits and diversity has helped HP earn a reputation as a top defensive tech play.
So who are some of the digital practitioners within HP? Michael Mendenhall recently came from Disney to oversee all global marketing. Christopher Curtin followed him over from Disney in August to oversee digital strategy. He had a few speaking engagements in 08 at AdTech, Frost and Sullivan, and OMMA East during AdWeek in NYC. I had the chance to attend this show last year and the main topic then was the downturn of traditional media, mostly TV. This year social media was a hot topic.
Social media are the bane of my existence, says Chris Curtin, vp digital strategy, H-P. “It has greatest promise for us but has to be thought through and not just the ultimate PSS of your campaign.”
Scott Berg, who works under Chris Curtin as Director of Digital Strategy, recently posted some nice 2009 predictions. HP Labs is doing some great work with regard to social technology research. Bernardo A. Huberman, Daniel M. Romero and Fang Wu lead up the Social Computing Laboratory and recently published a detailed paper on the online social habits and trends within Twitter.
Look for HP to take advantage of their financial position vs their competitors and to make significant strides in the media and with consumers. HP will drive digital strategy in 09 and push into new digital mediums we have not seem them in.
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