HP has recently posted its fourth quarter results.  As per recent report, HP reported earnings of $7.1 billion, or $3.32 a share, on revenue of $127.2 billion, up just 1 percent from a year ago.

Stats revealed, the company has reported Q4 earnings of $239 million, or 12 cents a share, on earnings of $32.1 billion. On the other hand, it reported earnings of $2.5 billion, or $1.10 a share, on revenue of $33.3 billion, in the same period a year ago. 
 
Along with Q4 results, the world's largest technology company by sales also gave a modest earnings forecast for fiscal 2012.
 
It has been reported that HP is now focusing to earn profits from servers, storage computers and software, and gradually reducing its dependence on PCs. Also, HP is planning to build a new webOS-powered tablet.
 
Although, HP’s fourth quarter showed that the company has stabilized, but the outlook for 2012 indicates that there are multiple landmines ahead.
 
Here’s a look at some particularly worrisome areas for HP in 2012.
 
HP’s mainstay enterprise server, storage and networking unit is starting to sputter. From the stats revealed, it is observed that revenue for this unit is down by 4 percent from a year ago. Analysts believe, this is a direct effect of slower economic growth.
 
The Itanium business probably isn’t coming back. From the report found it is seen that in Q4 sales of HP’ Itanium-based Integrity server line was down by 23 percent from a year ago. Oracle and HP are against each other over Itanium which is affecting HP’s sales. In a case, if HP and Oracle settle, it’s quite unsure that customers will flock to Itanium now.
 
Imaging and printing business to flourish. It is observed, HP’s imaging and printing business is the only business making money, but it’s a much smaller on than it was just a year ago. Imaging and printing revenue for the fourth quarter was $6.32 billion, down from $6.99 billion a year earlier. Now, it is expected that HP will try to expand imaging and printing business to earn more revenues.
 
The research and development is priority. Analysts believe, HP is at least three years away from funding innovation that will further take company’s growth to a high level.
 
Whitman recently said in an interview that she is not building any strategy for next month or next quarter, but planning to take company to a great level over the next decade.
 
Analysts further quote, the problem for HP is that it spends less on Research & Development; where IBM invests heavily in R&D every year with 6 percent of revenue, HP spent 2.5 percent of its revenue in R&D in fiscal 2011. Even, Dell is increasing its R&D spending.

Satinder Kaur