Copy Machine: H-P, Post-Compaq, Looks Like Its Old Self
Hewlett-Packard Co.'s acquisition of Compaq Computer Corp. was designed to significantly remake H-P. But on the second anniversary of the biggest-ever technology merger deal, the new H-P isn't looking all that different from the old one -- and that isn't necessarily good for investors.
Prior to the $19 billion deal's May 2002 close, Hewlett-Packard was a diversified technology concern with mediocre computing businesses and a red-hot printer unit that generated the bulk of its profit and revenue. Today, that profile hasn't substantially changed. Even as H-P's computing businesses continue to struggle for sustained growth, its printing unit remains its greatest strength, contributing about 30% of quarterly revenue and 70% of quarterly profit.
H-P does differ now, of course, in that it is a much bigger company. Combined with Compaq, it delivers annual revenue of more than $70 billion, compared with around $45 billion as a stand-alone firm. Its work force numbers about 140,000, up from about 86,000. Its global reach has expanded to more than 170 countries.
Still, the new H-P looks similar to its old self in many ways. It is ruled by the same cast of characters: Chief Executive Carly Fiorina runs H-P, with H-P veterans such as Ann Livermore and Vyomesh Joshi in charge of the same tech services and printer businesses that they had overseen prior to the deal. Even in structure, the new H-P echoes the old. On May 1, the company realigned behind two customer-oriented organizations -- one to sell to individual consumers and one to sell to corporate customers -- akin to what it had before buying Compaq.
The upshot: H-P still faces many of the same questions over growth and what value it brings beyond its printing business as it did two years ago. In 4 p.m. trading yesterday on New York Stock Exchange, H-P's stock fell 22 cents, or 1.1%, to $19.78, just slightly ahead of its closing price of $18.22 on May 6, 2002, when the combined company was launched.
Shares of other big-name technology companies are also down after a dip in the tech-heavy Nasdaq Composite Index this year. Yet some money managers have decided to sell off H-P stock in favor of faster-growing rivals such as printer company Lexmark International Inc.
"At the end of the day, you're still left with a company that has a great printing franchise but is struggling to sustain profitability in its other businesses," says Marty Shagrin, an analyst at money-management firm Victory Capital Management. "Our analysis of H-P's business today isn't meaningfully different from two years ago." Victory, which owned nearly six million H-P shares at the beginning of the year, "doesn't own much H-P anymore," Mr. Shagrin says.
Brian Humphries, an H-P spokesman, says the Palo Alto, Calif., company is much stronger today because of the Compaq acquisition. While he acknowledges the printing division remains H-P's strongest performer, he notes that the enterprise-computing and personal-computer businesses have returned to profitability in the past two years. H-P's market share in both those areas have improved. And the PC and tech-services businesses are growing, he says, propelled by laptop sales and tech-outsourcing.
As a result, Mr. Humphries says H-P is less dependent on printer revenue and profit and has become a more well-rounded company. Revenue from the printing unit accounted for just 31% of H-P's overall revenue in fiscal 2003, down from 43% in fiscal 2001. Meanwhile, the printing unit made up just 79% of total profits in fiscal 2003, down from 100% in fiscal 2001, he says.
"You have to look at the trajectory," says Mr. Humphries. "Is the trajectory going the right way? Yes, it is."
But some investors and analysts argue this trajectory is a negative one for H-P. By ramping up its PC and corporate computing business, what H-P has done is dilute the profitability of its printer division, says Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co. He calculates that a stand-alone H-P would have generated earnings of $1.59 a share in fiscal 2003 from its printing unit alone, compared with H-P's actual earnings of $1.16 a share that year.
Last August, amid much hoopla, H-P introduced 158 new electronic gadgets in its largest-ever consumer-product rollout. The devices include a multifunction printer with a liquid-crystal-display screen and wireless capabilities, as well as improved digital cameras, photo paper and scanners. Sales of these products have been robust, propelling H-P into a dominant position in the digital-imaging market, say industry analysts. But they note that the revenue and profit from this stream of gadgets have simply served to strengthen H-P's profile as a company with a strong printing division and weaker businesses in other areas.
Indeed, H-P's printer business alone is valued at $21 a share, says Kevin McCloskey, a portfolio manager at Federated Investors, which owned 9.6 million H-P shares at the start of the year. That means the market is assigning hardly any value to the company's other businesses. "Not a lot has changed within certain parts of the company," Mr. McCloskey says.
Jason Maxwell, a senior vice president at Trust Company of the West, which owns 1.25 million H-P shares, says he didn't worry so much about H-P's computing businesses before because they were a smaller part of the company's portfolio. "But now, we have to watch that these other businesses don't hurt the printing franchise," he says. "H-P paid $19 billion for the privilege of hardly making any money in some of these other businesses."
H-P's Mr. Humphries says the purchase of Compaq hasn't diluted the profitability of the printing unit. Instead, the deal has made the printing division stronger, he says, because printer sales can now be bundled along with sales of PCs and tech-services deals. He adds that H-P would be "in a much worse position now" now if the deal hadn't shored up its other businesses.
Indeed, even though H-P still faces plenty of competition from rivals such as Dell Inc. and International Business Machines Corp., if H-P executes consistently, its PCs and server-computers have the potential to jump-start profitability. Having cut costs and killed off overlapping products in both those businesses, H-P is now better positioned to develop those areas, say some money managers. The company has recently made a push into digital entertainment, which could drive sales of more PCs and servers.
Hugh Mullin, a portfolio manager at Putnam Investments, which owned 56 million H-P shares at the start of the year, agrees with this assessment. He says H-P is a more competitive company because it has been strengthened by the scale brought on by the Compaq acquisition. But Mr. Mullin adds that H-P "isn't yet where it needs to be." The same challenges of growth and sustained profitability that it faced two years ago still haunt it. Still, H-P may be "better prepared to deal with those challenges today," he says.
惠普似乎还是那个惠普
惠普公司(Hewlett-Packard Co., HPQ)并购康柏电脑(Compaq Computer Corp.)的初衷是重塑惠普。然而在这笔科技业有史以来最大的并购交易完成两周年之后，新惠普与老惠普似乎并没有很大的不同，而且在投资者心目中，新惠普的形象也未必有改善。
在2002年5月双方达成这笔价值190亿美元的交易之前，惠普的身份是一家多样化科技公司，其电脑业务普普通通，公司的主要利润及收入均来自业绩红火的打印机子公司。而今，这种格局并没有太大变化。惠普的电脑业务依旧在勉强维持增长，其打印机子公司仍然是其增长最为强劲的一个部门，公司季度收入的30%、利润的70%均来自打印机业务。
当然，惠普多少也有一些变化，它的规模比以前更大了。与康柏电脑合并后，公司年收入从合并前的450亿美元一越升至700亿美元。员工总数从86,000人升至140,000人左右。公司的业务网已覆盖全球170多个国家。
然而，在很多方面新惠普似乎与老惠普并无二致。原有的管理人士仍在扮演著过去的角色：首席执行长卡丽?费奥瑞娜(Carly Fiorina)仍在执掌惠普大权，惠普的老人儿安?利弗莫尔(Ann Livermore)和奥麦甚?乔希(Vyomesh Joshi)仍然分别负责技术服务分部和打印机分部。甚至在结构上新惠普也与老惠普如出一辙。5月1日，该公司根据客户类型将业务重组为两大部门：一个面向个人消费者，一个面向公司消费者，而这与并购康柏之前的结构简直没什么两样。
结果是，惠普仍面临著同样的公司增长及在打印机业务以外还能实现怎样的价值的老问题。纽约证交所周四收盘，惠普股价下跌2美分，至19.78美元，较其2002年5月6日宣布新公司成立时的18.22美元收盘价仅略有上涨。
随著那斯达克市场走低，其他大型科技股的股价也大都下挫。但尽管如此，在打印机制造商的股票中，一些基金经理还是决定抛弃惠普，转向利盟国际(Lexmark International Inc., LXK)等增长更快的竞争对手。
Victory资本管理公司的分析师马蒂?沙格林(Marty Shagrin)说，收购至今，惠普仍是一家打印机业务强劲、其他业务勉强维持的公司。他说："与两年前的情况相比，我们对惠普目前业务的分析并没有太大不同。"他说，年初持有近600万股惠普股票的Victory目前持股量已经不多。
惠普发言人布赖恩?汉弗莱斯(Brian Humphries)说，与康柏合并后惠普变得更加强大了。他承认，虽然打印机业务仍然是惠普最强劲的业务，但他同时指出，过去两年中商用电脑和个人电脑业务均重新实现了赢利。惠普在这两个领域的市场占有率也已有所提高。而且，受笔记本电脑销售及技术外包等方面的推动，个人电脑和技术服务业务也日渐增长。 汉弗莱斯指出，因此在收入和利润上，惠普对打印机业务的依赖性有所减少，并已成为一家业务更全面的公司。2003财政年度，打印机业务的收入仅占惠普总收入的31%，低于2001财年的43%。此外，打印机业务的利润占2003财年总利润的79%，而2001年为100%。
汉弗莱斯说，大家应该全面考察公司的发展轨迹。这样一种趋势不是正朝著正确的方向吗？当然是的。
但一些投资者和分析师认为，这一发展趋势对惠普来说是不利的。Sanford C. Bernstein & Co的分析师托尼?萨克恩纳格(Toni Sacconaghi)说，加强个人电脑和企业电脑业务实际上稀释了其打印机业务的盈利能力。按照他的推算，若不与康柏合并，单是打印机业务就能使惠普2003财年的每股收益达到1.59美元，而实际情况是惠普当年的每股收益只有1.16美元。
去年8月，惠普在其有史以来规模最大的产品展示中推出了158项新的电子消费品，其中包括带有液晶显示器和无线连接的多功能打印机、数码相机升级产品、相纸和扫描仪等。行业分析师们说，这些产品卖得很好，使惠普在数字影像领域占据了主导地位。但他们同时指出，此类产品创造的收入和利润只是强化了惠普的一贯形像，即拥有强大的打印机业务，而其余业务相对薄弱。
Federated Investors投资经理凯文?麦克洛斯基(Kevin McCloskey)说，实际上，惠普旗下打印机业务的每股价值就高达21美元。这意味著在市场看来，惠普的其余业务没什么价值。他说，惠普的业务结构并没有太多变化。Federated Investors在今年年初持有960万股惠普股票。
Trust Company of the West的高级副总裁贾森?麦克斯维尔(Jason Maxwell)则表示他以前不太担心惠普的电脑业务，因为此类业务所占的比重并不大。可如今，他必须留意这些业务会不会影响其打印机业务。惠普花了190亿美元来收购康柏电脑，但电脑等相关业务几乎没赚到钱。Trust Company of the West目前持有125万股惠普股票。
汉弗莱斯则表示，收购康柏并没有弱化打印机业务的盈利能力，反而使打印机业务更强大了，原因是现在能把打印机与个人电脑及技术服务捆绑销售。他还补充说，如果不是因为此次收购提振了惠普的其他业务，公司现在的处境会糟得多。
的确，虽然惠普面临来自戴尔公司(Dell Inc., DELL)和国际商业机器公司(International Business Machines, IBM)等众多对手的竞争，只要该公司始终如一，坚持到底，其个人电脑和伺服器业务的利润率就有可能猛增。一些投资经理指出，合并后惠普削减了成本，并取消了重叠的产品，因此惠普现在能更好的开发上述业务。惠普最近已进军数字娱乐产品领域，此举也许会带动个人电脑和伺服器的销售。
Putnam Investments的投资经理休?马林斯(Hugh Mullin)赞同上述观点。他认为，由于收购康柏给惠普带来了规模效应，惠普如今更有竞争力了。但他补充说，惠普并没有实现它希望的目标。惠普两年前面临的保持增长和持续盈利的难题至今仍然存在。但马林斯称，今天的惠普也许能更好地应对这些挑战。Putnam Investments在今年年初持有5,600万股惠普股票。
