Hewlett-Packard Company (HPQ), Dell Inc. (DELL): The Walt Disney Company (DIS)’s Bounce Bails Out the Dow

Dell Inc. (NASDAQ:DELL) has hardly had more success than Hewlett-Packard Company (NYSE:HPQ) recently amid the PC industry’s slump, but a privately held Dell will be able to take on its sales slump with much more flexibility than before. That’s bad news for HP’s PC segment, particularly if Dell Inc. (NASDAQ:DELL) slashes prices in order to court consumers — something that will only hasten the decline in Hewlett-Packard Company (NYSE:HPQ)’s PC sales. HP’s personal systems branch, which includes PCs, saw revenue fall by 11% in the most recent quarter.

In the long run, however, Dell Inc. (NASDAQ:DELL)’s move could be a blessing in disguise to Hewlett-Packard Company (NYSE:HPQ) investors. The company desperately needs to transition away from the losing PC segment toward growth sectors such as servers, and if Dell Inc. (NASDAQ:DELL) undergoes big changes in order to bolster its own PC sales, HP will have to take stronger action in its turnaround. HP has taken investors on a rough ride during its turnaround process, but there’s still some hope for this tech giant’s rebuilding. Just don’t count on a miracle any time soon.

The article Disney’s Bounce Bails Out the Dow originally appeared on Fool.com and is written by Dan Carroll.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool recommends Walt Disney (NYSE:DIS). The Motley Fool owns shares of Walt Disney.

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