Khamis, 22 Mei 2014

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The Star Online: Business

HP may cut up to 16,000 more jobs as results disappoint

Posted: 22 May 2014 07:02 PM PDT

SAN FRANCISCO: Hewlett-Packard Co plans to cut as many as 16,000 more jobs in a major ramp-up of CEO Meg Whitman's years-long effort to turn around the personal computer maker and relieve pressure on its profit margins.

Whitman said the turnaround remained on track and her raised target reflected how HP continued to find areas to streamline across its broad portfolio, which encompasses computing, networking, storage and software. But some analysts wondered whether it signaled a worsening outlook for the coming year, or if more jobs may be cut.

"The rationale makes sense," said RBC analyst Amit Daryanani. But "you do worry if there's a finality to this process, or if it's an ongoing thing that may affect morale at the end of the day. So far the trend has been worrisome."

HP, whose sprawling global operations employ more than 250,000, estimated about three years ago when it first hatched its sweeping overhaul that it would need to shed 27,000 jobs. That number rose to 34,000 last year.

On Thursday, it estimated another 11,000 to 16,000 more jobs needed to go, scattered across different countries and business areas. That took the grand total under Whitman's restructuring to 50,000.

The Silicon Valley company is trying to reduce its reliance on PCs and move toward computing equipment and networking gear for enterprises, part of Whitman's effort to curtail revenue declines and return the world's No. 1 PC maker to growth.

But that goal remains elusive. The company posted a disappointing 1 percent drop in quarterly revenue, as it struggled to maintain its grip on the shrinking personal computer market and weak corporate tech spending.

That marked its 11th consecutive quarterly sales decline.

Shares in HP closed down 2.3 percent at $31.78, after the company inadvertently posted the results on its website more than half an hour before the closing bell.


Research jobs, which are vital for innovation and long-term growth, will continue to grow, Whitman stressed.

HP is looking to cut back more in "areas not central to customer-facing and innovation agendas," she said in an interview, rather than areas like research. "That's not what we're doing here. You need to look at the R&D spending, which is up."

HP recorded sales of $27.3 billion in its fiscal second quarter ended April 30, just shy of the $27.41 billion Wall Street had expected.

Whitman said China remained a challenging region, though revenue from that country rose in the quarter. U.S. companies like International Business Machines Corp <IBM.N> and Cisco Systems Inc <CSCO.O> have blamed recent lackluster performances on a backlash against American companies in China, in the wake of U.S. spying allegations.

On Thursday, HP forecast full-year earnings of $3.63 to $3.75 a share, compared with Wall Street's estimate for $3.71.

It reported non-GAAP diluted net earnings of 88 cents a share in the second quarter, up 1 percent from a year earlier and about level with what analysts, on average, had expected.- Reuters

Trading in Bumi Armada suspended

Posted: 22 May 2014 06:51 PM PDT

KUALA LUMPUR: Trading in Bumi Armada has been suspended with effect from 9am on Friday, the company told Bursa Malaysia in a filing.

The group said the suspension was prior a material announcement.

The group, which owns the biggest fleet of offshore support vessels in Malaysia said in March that it planned to raise RM1.5bil in sukuk for working capital.

The money will go towards building new floating, production, storage and offloading vessels.

Market opens higher

Posted: 22 May 2014 06:22 PM PDT

KUALA LUMPUR: The local bourse edged higher Friday with gains in Petronas-related stocks and UMW supporting the market.

Asian bourses were up in early trade following the positive close on Wall Street with investor sentiment buoyed by improving US and Chinese manufacturing data.

Range-bound trading will continue to characterize the market today with BIMB Securities Research expecting the immediate resistance at 1,880.5 and the immediate support at 1,869.7.

Analysts at JF Apex Research expect any gains in Asian markets to be capped by geopolitical risks in South East Asia 

At Bursa Malaysia, PetGas rose 20 sen to RM24.60, PetChem four sen to RM6.80 and PetDag 26 sen to RM23.76.

UMW rose 20 sen to RM10.98, Tenaga four sen to RM12.22 and Telekom two sen to RM6.27.

Decliners were Public Bankm down two sen to RM19.86 and CIMB one sen to RM7.37.

IHH fell eight sen to RM4.18 and IOI five sen to RM5.14.


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