Hewlett-Packard Company (HPQ): This Stock Still Has Room to Run

Furthermore, HP is taking a variety of actions to bolster sales and profitability in the printer business. The “Ink Advantage” program is lowering ink prices in developing countries while boosting printer hardware prices. HP’s management has reported very good results from this initiative so far. In developed markets, an “Ink in the Office” campaign is moving many small businesses from laser to ink technology, which is cheaper for customers but more profitable for HP. Moreover, the company refreshed its multifunction printer lineup last fall for the first time in seven years. This is expected to result in sales gains throughout 2013 in that category. Lastly, HP is reducing printer SKUs by 30% by the end of next year, which will increase efficiency and boost profitability.

Think long-term
HP’s most recent quarterly results showed plenty of weak spots, but also some pockets of strength. The overall result was that HP blew by its own guidance and the analyst consensus by roughly 15%. Despite this strong showing, the Goldman Sachs Group, Inc. (NYSE:GS) analysts apparently expect HP to miss its own guidance and the Wall Street consensus for the full year by around 8%. As an HP shareholder, I’m not too worried about that possibility. There’s still a lot of work to be done, but Meg Whitman and her team have laid a foundation for long-term success.

The article Hewlett-Packard Still Has Room to Run originally appeared on Fool.com.

Fool contributor Adam Levine-Weinberg owns shares of Hewlett-Packard. The Motley Fool recommends Goldman Sachs.

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