HP readies launch amid lowered forecasts
Even with some analysts lowering their earnings expectations for the company, Hewlett-Packard is hoping to make a big bang Monday when it introduces new consumer gear.
As first reported by CNET News.com, HP will publicly unveil in New York City a "Radically Simple, Better Together" strategy that has been brewing for months. The company has been working to better tie together its diverse portfolio of tech gadgets such as cameras, printers and PCs.
The product push, which HP says amounts to more than 100 new products and is its biggest consumer launch ever, has been dubbed "Big Bang 2," the follow-up to last year's complete overhaul of the consumer-printer lineup. The company is expected to unveil a number of new printers, cameras and notebook computers, as well as gadgets such as a device for converting VHS home movies to DVDs.
HP has been exploring a number of ways it can create better connections between its products, from adopting common user interfaces to developing software to standardizing its notebooks and cameras on Secure Digital memory cards.
The company plans to show off the new products it is introducing in new demo and education centers to be set up within some existing retail stores.
HP also plans an ad blitz to tout its new wares. The company is also setting up a toll-free number for consumers to call HP about its consumer gear.
For the event, HP is building out a loft in midtown Manhattan that it will use to show off the company's new technologies. CEO Carly Fiorina is set to kick off the event with a speech at 9 a.m. ET.
HP's effort comes after a number of analysts this week lowered their expectations for the company. Lehman Brothers, Goldman Sachs and Salomon Smith Barney on Thursday both cut their quarterly earnings estimates for HP, which is set to report its earnings Aug. 19.
"Our sense is that (HP's third quarter) has been no walk in the park, primarily due to economic weakness in Europe," Salomon Smith Barney analyst Richard Gardner wrote in a research note Thursday. Gardner trimmed his earnings estimate for the quarter to 26 cents per share, down a penny from his earlier prediction.
Lehman Brothers analyst Dan Niles cut his revenue forecast on Tuesday, saying that weak European and Japanese markets could undercut somewhat-better-than-expected U.S. sales. "We believe demand in May/June was a bit worse than expected, though demand in July improved," Niles wrote in a research note.
Still, Niles said he expected HP to be rather upbeat about the current quarter. "The Big Bang 2 launch next week and a general improvement in corporate sentiment should drive a solid Q4 outlook," Niles wrote.
Gardner said investors have become too negative on HP stock, having sent the shares down more than 15 percent since a mid-July peak of $23.50. "We believe the prospect of an in-line, somewhat mixed quarter is more than fairly reflected in the recent decline," Gardner wrote. Gardner also raised his outlook for the following quarter by a penny per share, saying Monday's launch, among other factors, could spur better-than-expected results.
However, Goldman Sachs analyst Laura Conigliaro said Thursday that she was not so sure HP's stock slide was at an end.
HP's stock price already factors in some measure of disappointing earnings, "but given the uncertain magnitude, there could be a bit farther to go before hitting the valuation floor," Conigliaro wrote.