In Focus

July 24, 2001 | In Focus Archive »

Hewlett-Packard

by Chick Megan

NOTE: For the month of July, we decided to feature publicly traded companies from the states in which a few of the Chicks in our club roost. Following Georgia, Ohio and Minnesota, it's now time to spend a week out west! Welcome to California, featuring many a company on the Forbes 500 list. Grab your sunscreen and shades, lay back on your beach towel and get ready to learn a bit more about Intel, Hewlett-Packard, PacifiCare Health Systems, Charles Schwab, Walt Disney and Apple Computer.

Remember the first time you ever used a computer? And then how nifty it was the first time you actually got to print out your document? I always thought it was the coolest thing. I mean, to kids nowadays computers and printers are commonplace. Heck, my five year old already knows more than my husband ever will about computing. Personally, I think it's pretty incredible that I actually got to live through such an interesting event: the invention of these products. Probably a lot like how my folks' folks felt about the introduction of indoor plumbing. It's truly revolutionary. And when I remember back to the first system I ever used for printing back in college, it was none other than Hewlett-Packard. Then, at my first real job, my personal computer was hooked up to an HP. Now I work out of my home and you'll never guess what I use for a printer...

Founded in 1939, Hewlett-Packard (NYSE:HWP) has 88,500 employees worldwide. Its corporate headquarters are in Palo Alto, California and it has more than 540 offices and distributorships in more than 120 countries. HWP is considered a leading provider (globally) of computing and imaging solutions and services. The company has had much success and recognition over the years, including the following corporate rankings in the year 2000 alone:

1 of 5 winners of The Ron Brown Award for Corporate Leadership
#2 US based Computers/Office Equipment company- Fortune 500
#2 Best Corporate Citizen-Business Ethics (March/April 2001)
#5 Most Admired Computers/Office Equipment Company in America- Fortune
#9 Forbes 100 Largest US Multinationals
#11 Asia's Top 200 Leading Companies- Far Eastern Economic Review
#11 Asia's Most Admired Company - Asian Business
#13 Fortune 500-- US Industrial and Service Corporations
#14 Forbes 500 Composite Ranking of US Public Companies
#32 Employer Among the Fortune 500 US Industrial and Service Corporations (based on number of employees)

HWP's Chairman and CEO, Carleton (Carly) Fiorina, a very, very Chicky Chick, has been with the company since July, 1999 and has been credited with bringing the company back to basics. She felt the company had lost some focus over the years and wanted to return to their policy of innovation and inventiveness, as well as providing customers with the best possible consumer experience. Her background, which included managerial positions with AT&T and Lucent Technologies, led to much of their success. That, combined with a double major from Stanford University, a Masters in Business Administration from the Robert H. Smith School of Business at the University of Maryland, and a Master of Science Degree from MIT's Sloan School, has given her the knowledge and qualifications to help bring a company to the next level -- and then some. HWP is damn lucky to have her.

According to their website, www.hp.com, HWP's financial history has continuously gone in the right direction.

	Revenues	Earnings	Total Assets	Dividends Per Share
FY00	48,782	3,561	34,009	.32
FY99	42,370	2,678	28,624	.30
FY97	35,465	2,515	26,681	.26
FY96	31,613	2,085	22,934	.22

It just all seems too good to be true, doesn't it? But this company has proven itself time and time again and seems to have what it takes to continue to grow. Let me give you an example of one of their latest business decisions. On June 25, 2001, it was announced that Hewlett-Packard and America Online-Time Warner were going to expand their relationship. In a terrific move, HWP will begin providing AOL/Time Warner with a variety of computing system products, including high-end UNIX HP Superdome Servers, and L-and N-Class UNIX servers, among other products and services. Now don't you just wish you knew what all that meant? Yeah, me, too. It all sounds pretty grandiose, but even I can see that what's exciting is what HWP receives in return. AOL, which boasts that its users are online for an average of 70 minutes per day, per customer, will market HWP across several of AOL's interactive brands such as Spinner.com, ICQ and Netscape. Talk about major-league possibilities!

The next doozy of a move made by HWP includes their new Flexible Pricing Program for Servers. This program is designed for their customers who use that UNIX system and something else called the HWP Intel IA-32-based servers (again I'm clueless, but impressed.). This allows the companies to be billed based on their usage rather than pay one fee regardless of how often they are using the system. HWP customers everywhere are rejoicing.

It is because of these types of strategies and focus on customer satisfaction that HWP has won so many accolades over the years. And with the craziness of all tech-related companies in the past year, it isn't surprising to see HWP's stock price has ranged from a 52-week high of $64.78 to a 52-week-low of $25. Right now, HWP is sticking right around the $26 mark, a bargain if there ever was one. In light of the current thinking that perhaps the tightening of the purse strings for tech-spending is over, some analysts are starting to change their ratings for Hewlett-Packard. One analyst, John Jones of Salomon-Smith Barney, raised his rating from "neutral" to "buy" and his 12-month price target to $34 from $30. Like all stocks there are no guarantees, but HWP seems to be printing a pretty clear picture.

And this Chick likes what she sees.