Top Of The Order:
It Ain t What It Used To Be: Hewlett Packard hasn t been the crown jewel of Silicon Valley for some time. That s not to say it isn t still a force in the tech sector, but let s be honest: HP, which split into HP Inc. and Hewlett Packard Enterprise last year, isn t the first company, or maybe even the second or third, that comes to mind when people discuss who in the area is doing groundbreaking work that grabs the world s attention.
And now, with Hewlett Packard Enterprise spinning off its enterprise services business and merging that with Computer Sciences in an $8.5 billion deal, there is going to be even less of the tech giant to go around. But that s not necessarily a bad thing, at least in the minds of investors and those who follow Hewlett Packard on Wall Street.
Hewlett Packard Enterprise shares climbed almost 7 percent Wednesday after the company announced the enterprise-services spinoff, and released its fiscal second-quarter results after the close of trading Tuesday. The company reported a profit of 42 cents a share on $12.71 billion in revenue, while analysts surveyed by Thomson Reuters had forecast Hewlett Packard Enterprise to earn 42 cents a share on sales of $12.34 billion.
Several analysts who follow Hewlett Packard Enterprise said the companies results showed that Chief Executive Meg Whitman isn t backing away from her efforts to streamline the company and focus on its strengths.
In slimming down, Hewlett Packard Enterprice is really going opposite Dell and EMC, said Steven Milunovich, of UBS. Whitman emphasized her belief in focus, which has been our mantra so it s hard to disagree. It sounds like the sales and marketing efforts, long an HP weakness, are much improved.
At Morgan Stanley, analyst Katy Huberty said spinning off its services operations allows Hewlett Packard Enterprise to focus its hardware and server offerings on new growth markets such as private cloud computing.
And by slimming down, there s a sense that Hewlett Packard Enterprise may just be able to turn things around by emphasizing the business-computing industry that built HP into the titan it used to be.
Middle Innings:
Back In The Saddle: The bidding for Yahoo s Internet business goes on, and it appears that another telecom giant wants in on the action.
According to Bloomberg, AT&T has made a bid for the Yahoo business, and now represents a rival to Verizon, which many Yahoo watchers viewed as the leading candidate in the buying process. AT&T is said to be interested in Yahoo in order to match Verizon, which owns AOL, and could like Yahoo s algorithm-based ad technology with its mobile-video services.
How Many Shows Is That?: Netflix is everywhere these days. Its Internet video-streaming service can be found in 190 countries, including those in Europe. And the European Commission wants more out of Netflix. And Amazon. And Apple s iTunes, too.
The EC is proposing regulations that would require those U.S.-based video-streamers to carry at least 20 percent of their content from Europe, and put more money into European-based productions. Needless to day, Netflix, in particular, doesn t like the idea, and says it already invests millions of euros into making shows in Europe.
Bottom Of The Lineup:
Here s a look at how some leading Silicon Valley stocks did Wednesday…
Movin On Up: Gains came from Nimble Storage, Oclaro, Harmonic, GoPro and Zeltiq Aesthetics.
In The Red: Decliners included Yahoo, Rovi, 8×8, Ixys and Rambus.
The tech-focused Nasdaq Composite Index rose 0.7 percent to 4,894.
The blue chip Dow Jones Industrial Average climbed 0.8 percent to 17,851.
And the broad-based Standard & Poor s 500 Index rose 0.7 percent to end the day at 2,090.
Quote Of The Day: We are the defending champs. — Golden State Warriors coach Steve Kerr, following the Warriors second-straight loss to Oklahoma City, which put the Warriors in a 3-1 hole and needing to win three games in a row to stay alive in the NBA playoffs.
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Photo: Hewlett Packard Enterprise CEO Meg Whitman. (LiPo Ching/Bay Area News Group)
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