Wall Street on Thursday seemed conflicted about Hewlett-Packard, following the Palo Alto company’s earnings report yesterday, which beat analysts expectations but showed a continued decline in sales and profit.
Here are a few examples from analysts’ notes to their clients:
“Meg Whitman, in our view, has made impressive strides in righting the business and rekindling some product innovation,” concluded the experts at Wells Fargo. “However, we think the real test will be in driving growth, which could prove challenging…”
“We were wrong to be too cautious on their performance,” said Needham & Company’s HP watchers. However, they added, “we remain concerned with the company’s positioning in servers, PCs, tablets and smartphones, and these areas will be difficult to fix….”
While acknowledging that HPs earnings were better than anticipated, analysts at Deutsche Bank warned, “we remain cautious on HP’s weak fundamentals, share loss, ongoing revenue erosion and challenging macro conditions.” They added, “shrinking your way to profitability is not a successful (long term) strategy.”