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Hewlett-Packard Seeks to Boost Market Share

June 04, 2003|Terril Yue Jones | Times Staff Writer

Hewlett-Packard Co. plans to increase its revenue from selling computers and services to corporate customers by boosting its share of the market, executives of the world's No. 2 computer maker said Tuesday.

The Palo Alto-based company will meet Wall Street estimates for second-half revenue and earnings even though the U.S. economy and the high-tech market remain sluggish, Chief Executive Carly Fiorina said at a meeting with financial analysts.

"While we do see signs of stability, we do not see signs of a pickup," Fiorina told analysts at the Regent Wall Street Hotel in New York. "What we can predict is our performance."

The consensus of analysts who track HP is that the company will take in $36.6 billion in revenue in the second half of this fiscal year, which ends Oct. 31, and earn 62 cents a share, according to IBES International. HP earned 80 cents a share and had $34.5 billion in revenue in the second half of its 2002 fiscal year.

With technology spending languishing, HP is trying to capture a greater share of what companies do spend, said Stephen Baker, an analyst with NPD Group, a technology consulting firm.

"Certainly that's within their ability to control," Baker said. "They can't control their customers budgets, but can develop products that address a bigger percentage of a customer's budget."

Most of HP's profit comes from its Imaging and Printing Group, which plans a major product blitz this summer and fall.

"We're going to have not 50, but hundreds of new products for this year back-to-school," said Vijay Joshi, executive vice president for the group. He did not give details of the new offerings but said they would be in the areas of digital imaging, entertainment and products to help small-business owners.

Some analysts have expressed skepticism of HP's plan to expand into consumer goods, where margins are much thinner than for high-end computing systems. Fiorina defended the strategy.

"Some of you have asked, 'Why be in digital cameras?' " Fiorina said. "Because it grows the digital category. Think about it -- it's a computer with a lens. That's why."

HP stock rose 2 cents Tuesday to $20.07 on the New York Stock Exchange.

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