HP Wary about Consumer Spending after Earnings Fall Short

An article<http://news.cnet.com/8301-31021_3-20034982-260.html?tag=topStories2> on CNET<http://www.cnet.com/> stated that HP<http://www.hp.com/> is optimistic, but wary of upcoming consumer spending.

Hewlett-Packard today reported that for the first quarter of 2011, the company brought in revenue of $32.3 billion. That's an increase of 4 percent from a year ago, but slightly below what Wall Street was hoping to hear. This was a bit upsetting for Wall Street analysts who were expecting revenue between $32.75 billion and $33.59 billion, and earnings per share between $1.26 and $1.32.

HP CEO Leo Apotheker released an upbeat statement on the earnings report: "I'm pleased with our EPS and margin expansion during the quarter. Going forward, we have the opportunity to further capitalize on our customers' demands for higher value-added solutions...HP has a powerful portfolio, including exciting, recently announced cloud and connectivity offerings. We are focused on leveraging these strengths to extend our leadership and accelerate growth."
During a conference call with reporters this afternoon, HP executives gave a couple reasons for HP's miss: the company's enterprise business didn't resign or land the same number of big enterprise contracts it expected, and the consumer PC market grew slower than previously anticipated.
"We had good growth in commercial sectors and we gained share in the U.S. enterprise sector however, it was offset by continued softness in the consumer PC market," Apotheker said.
As a result, HP today revised its full year 2011 revenue forecast slightly downward from $131.5 billion to $133.5 billion to between $130 billion and $131.5 billion. CFO Cathie Lesjak explained, "We continue to remain cautious about the consumer spending environment, particularly with PCs." The enterprise business, she added, will "grow behind yearly seasonality." In other words, it will be slower than HP anticipated several months ago.

Read more: http://news.cnet.com/8301-31021_3-20034982-260.html#ixzz1EjH7NVKT

Joe Carretta

Intel to buy McAfee

According to the New York Times, a business merger is about to take place. On Thursday, August 19^th Intel, the leading manufacturer of semiconductor chips agreed to buy McAfee, the computer antivirus software maker for about $7.7 billion in cash. Besides Intel’s efforts to produce a core-chip making, their efforts to expand the business and take over McAfee, has been their biggest effort to date in terms of expanding the company. Their last major purchase was in 1999, when Intel bought Level One Communications for $2.2 billion.

Paul Otellini, Intel’s chief executive, said, “In the past, energy-efficient performance and connectivity have defined computing requirements. Looking forward, security will join those as a third pillar of what people demand from all computing experiences.”

With The TNS Group being in the tech industry, we know that this industry has been one of the busiest for deal-makers and companies taking over new sectors.  With Intel’s purchase of McAfee it will put the company into covering security tech.

Tara McKenna