Hp Faces Slowing Chinese Demand

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Hp Faces Slowing Chinese Demand

Signs of rapidly worsening Chinese demand for information technology giants IBM and Cisco Systems Inc are starting to spook Hewlett-Packard investors. HP's year-long stock rally sputtered last week amid fears a faster-than-anticipated slowdown in emerging markets, above all China, may dash the computing giant's hopes for a return to growth in…

Signs of rapidly worsening Chinese demand for information technology giants IBM and Cisco Systems Inc are starting to spook Hewlett-Packard investors.

HP's year-long stock rally sputtered last week amid fears a faster-than-anticipated slowdown in emerging markets, above all China, may dash the computing giant's hopes for a return to growth in 2014 or beyond.

Cisco has warned about crumbling Chinese demand. IBM last month reported a sales drop of more than 20% in the world's No. 2 economy.

Both also reported weakness in other emerging markets as well, but it was China and concerns about sales declines in that market that has grabbed headlines.

HP is already grappling with expectations of slowing United States federal spending, a fundamental erosion of PC demand and unrelenting competition from Lenovo and Dell. So it can ill afford a steeper-than-expected dropoff in China, which is estimated to account for a fifth of Hp's revenue and is one of its most crucial growth markets.

Investors are looking to the computing giant, which reports quarterly results tomorrow, to shed more light on goings-on in the worlds largest PC market.

"All the giant tech companies are somewhat at risk now. You have to worry if the other companies are going to report the same kind of thing in their fourth quarter," said Peter Tuz, president of Chase Investment Counsel Corp in Virgina.

Shares in HP, up 77% so far this year, have lost almost 5% in the week since Cisco blamed a dismal business outlook on deepening fallout from the Snowden revelations. Some analysts also blame competition from networking giant Huawei and the governments increasing tendency to buy local.

Mizuho Securities analyst Abhey Lamba cited another culprit: a slowdown in spending by Chinese state enterprises awaiting policy signals from a new government.

Microsoft said China was the company,s weakest performing market during the September quarter. The picture is far from clear, however. Juniper Networks said last week its business continues to grow in Asia, including China. – Reuters, November 25, 2013.

Hp Faces Slowing Chinese Demand

Signs of rapidly worsening Chinese demand for information technology giants IBM and Cisco Systems Inc are starting to spook Hewlett-Packard investors. HP's year-long stock rally sputtered last week amid fears a faster-than-anticipated slowdown in emerging markets, above all China, may dash the computing giant's hopes for a return to growth in…

Signs of rapidly worsening Chinese demand for information technology giants IBM and Cisco Systems Inc are starting to spook Hewlett-Packard investors.

HP's year-long stock rally sputtered last week amid fears a faster-than-anticipated slowdown in emerging markets, above all China, may dash the computing giant's hopes for a return to growth in 2014 or beyond.

Cisco has warned about crumbling Chinese demand. IBM last month reported a sales drop of more than 20% in the world's No. 2 economy.

Both also reported weakness in other emerging markets as well, but it was China and concerns about sales declines in that market that has grabbed headlines.

HP is already grappling with expectations of slowing United States federal spending, a fundamental erosion of PC demand and unrelenting competition from Lenovo and Dell. So it can ill afford a steeper-than-expected dropoff in China, which is estimated to account for a fifth of Hp's revenue and is one of its most crucial growth markets.

Investors are looking to the computing giant, which reports quarterly results tomorrow, to shed more light on goings-on in the worlds largest PC market.

"All the giant tech companies are somewhat at risk now. You have to worry if the other companies are going to report the same kind of thing in their fourth quarter," said Peter Tuz, president of Chase Investment Counsel Corp in Virgina.

Shares in HP, up 77% so far this year, have lost almost 5% in the week since Cisco blamed a dismal business outlook on deepening fallout from the Snowden revelations. Some analysts also blame competition from networking giant Huawei and the governments increasing tendency to buy local.

Mizuho Securities analyst Abhey Lamba cited another culprit: a slowdown in spending by Chinese state enterprises awaiting policy signals from a new government.

Microsoft said China was the company,s weakest performing market during the September quarter. The picture is far from clear, however. Juniper Networks said last week its business continues to grow in Asia, including China. – Reuters, November 25, 2013.

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December 10, 2013 at 11:27 AM