HP’s future growth questioned by analysts

August 22, 2014

hpFinancial analysts believe the OEM’s future prospects remain “in question”.

Market Watch reported on market analysts’ views concerning HP’s quarterly results, in which the OEM reported increased revenue.

Noting that Wall Street “questions HP’s viability”, the news site states that market analysts Cantor Fitzgerald believes HP’s long-term “trajectory” towards better results “remains in question”, and the OEM’s announcement that it is planning to cut another 16,000 jobs added to this, with some analysts not “convinced” that sales of desktop computers, alongside cuts, will “be enough” to “carry [HP] forward over the long term”.

Cantor Fitzgerald added that it had increased its price target on HP shares to $34.50 (€26) from $30 (€22), and expressed concern over the “low-margin profile” of the PC market globally, in a response to HP CEO Meg Whitman’s conference call to investors earlier this week, in which she said the PC market “continues to contract”, but HP has increased revenue in PCs by 12 percent year-over-year.

Additionally, the analysts’ estimates for the whole year “remain 17 percent below levels” from 2008, with shares in HP having fallen by 25 percent in value since that point before the “mobile device market took off”. Similarly, analysts Raymond James warned that the OEM’s recovery “remains uneven”, predicting that HP’s overall revenue growth “would decelerate in the second half of this year” despite an “expected improvement” among other similar manufacturers.

In turn, Raymond James stated that free cash flow generation “could decline meaningfully” in 2015 due to the slowing down of growth for PCs in addition to the stabilisation of services. One of the company’s analysts, Brian Alexander, commented that HP management’s confidence “does not seem to be fully supported by results”, though “massive headcount reductions should keep” estimates “intact for the foreseeable future”.

Conversely, two other market analysts – J.P. Morgan and Morgan Stanley – were “more bullish” in their predictions, with the former stating that “underlying trends suggest that HP’s guidance is doable”, and the latter mentioning that “free cash flow strength and revenue growth puts HP shares on a path towards $40 (€30)”.

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HP reports increased revenue in third quarter results

August 21, 2014

hp11The OEM reported a slight increase of one percent in net revenue.

HP’s results included the aforementioned net revenue increase of one percent to $27.6 billion (€20.7 billion) over the quarter, with operating company net cash up to $4.9 billion (€3.6 billion), a “sequential improvement” of $2.2 billion (€1.6 billion).

Cash flow from operations grew 36 percent year-over-year to $3.6 billion (€2.7 billion), and $881 million (€663 million) was returned to shareholders “in the form of share repurchases and dividends”. Other results referred to generally accepted accounting principles (GAAP), which are the standard guidelines for financial accounting, also known as accounting standards.

The OEM’s third quarter non-GAAP diluted net earnings per share increased three percent year-over-year to $0.89 (€0.67), meeting a prior prediction of between $0.86 (€0.64) and $0.90 (€0.68) per share. In turn, third quarter GAAP diluted net earnings per share fell 27 percent year-over-year to $0.52 (€0.39), lower than the predicted range between $0.59 (€0.44) and $0.63 (€0.47) per share.

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Everlert brings franking cartridge production in-house

August 20, 2014

DM300-left--prodDetail_LargeManufacturer of ink cartridge for the US postage meter industry and sister company of Totalpost to manufacture cartridges domestically from January 2015.

Everlert announced the decision to move itsfranking ink cartridge production in-house in a press release, following approval from its Board of Directors of preliminary plans and a corresponding budget to begin manufacturing cartridges at its plant in Southern California from January 2015.

The company hopes that moving the production to the US will increase its gross margins by up to 40 percent, as well as reducing international shipping time and costs, decrease lead time for fulfilling large orders, enhance quality, take advantage of local tax credits related to R&D and production, and allow the company to employ a “just-in-time” inventory model – all of which should help to strengthen its financial position.

In preparation for the development, the company over the last few months has begun to invest in acquiring key components for the production line, such as programming computers, empty cartridges and “other essential materials”. Meanwhile UK-based Totalpost, whose USA arm was acquired by Everlert in 2012, will provide training and support in setting up the production line, as well as training personnel.

John Taylor, Director of Everlert, Inc., said: “There is no doubt that bringing the production line in-house domestically will be a win-win proposition all the way around. It will help us achieve higher quality since we won’t have to ship the cartridges internationally, reduce lead time, and will give us the flexibility to drive down our production cost, which should help boost our bottom line.”

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More Xerox jobs cut in New York

August 20, 2014

Xerox's Webster campus. Credit: Democrat & Chronicle

Xerox’s Webster campus. Credit: Democrat & Chronicle

Further 123 lay-offs to be made by the OEM in Webster, New York, following 468 job cuts in Texas.

Democrat & Chronicle reported that the 123 jobs will be cut “by mid-November” following Xerox’s decision to close its facilities maintenance operations in Webster and outsource the work to Chicago-based commercial real estate services company JLL; with the affected jobs “related to providing maintenance and cleaning” for the OEM’s Webster R&D and manufacturing campus.

The announcement was indicated in a Worker Adjustment and Retraining Notification Act notice filed with the state Labour Department; with the company stating that the facilities maintenance operations closure “is a business decision based on our global strategy of exiting non-core activities”.

The Recycler reported recently that Xerox cut 468 jobs from its call centre in Houston, Texas “as a result of a change in business conditions” for one of its clients; although the OEM also announced the creation of 100 jobs at a call centre for one of its healthcare clients in Moosic, Pennsylvania.

Xerox’s Webster campus is “its single largest manufacturing site” and the company is “the area’s fourth largest employer and its largest manufacturer, employing around 6,300 people locally. Xerox spokesman Robert Wagner reportedly said that laid-off employees will have the opportunity to apply for positions with JLL “and it is expected that a good number of the employees will be offered job opportunities”.

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Autonomy’s founder “tries to clear name” in HP case

August 15, 2014

autonomy-logoMike Lynch’s chances of acquittal were evaluated in the case against his company.

The Guardian reported on the chances of Autonomy’s founder Mike Lynch avoiding legal action from investigators over HP’s accusations of fraud after it acquired the UK company, with the OEM recently laying the blame at Lynch’s feet.

After acquiring the company in 2011 for $11 billion (€6.6 billion), HP then wrote down the value of Autonomy by $8.8 billion (€6.6 billion) a year later, accusing Autonomy officials of “accounting fraud” despite the officials denying the accusations. Lynch and Autonomy’s finance director Sushovan Hussain have been said to be “architects” of a “massive fraud” by the OEM.

The article notes however that two years after the allegations were first made against Lynch, “scant evidence to support them has emerged”, with 750,000 pages of documents submitted to US government investigators by HP “remain[ing] hidden from public view”. Lynch’s perspective is that HP is not making any comment “because no fraud took place and the company does not have the evidence to convince a jury”, and recent events “seem to point that way”.

The Guardian additionally states that whilst HP has “threatened on many occasions” to sue both Lynch and his management team, it has “yet to take action”, with an HP shareholder, Rod Cook, recently aiming to try and stop the settlement agreed with shareholders and HP over the acquisition. Lynch’s attempts to clear his name would require either a court case or ruling “from one of the regulators looking into the issue” – the UK’s Serious Fraud Office (SFO), and the US Department of Justice (DoJ) as well as the Securities and Exchange Commission (SEC).

The three investigations by the three separate bodies “are at risk of petering out with no conclusive verdicts”, with the SFO investigation begun in March 2013 with “no developments since”. The newspaper comments that Lynch believes “it is not only his name that has been stained, but that of the British technology industry”, though Autonomy’s accounting and marketing methods “had attracted criticism before the HP acquisition”.

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US printing business diversifies over 36 years

August 15, 2014

Keith Dreier (top right) with St. Johns Printing and Cartridge World staff Credit: The St Augustine Record

Keith Dreier (top right) with St. Johns Printing and Cartridge World staff Credit: The St Augustine Record

Florida-based St. Johns Printing, which also tied with Cartridge World in 2007, celebrates 36 years in business as it continues to diversify its services.

In an article from The St. Augustine Record, Keith Dreier, who bought the company amid the economic downturn in 2011 discussed his reasons for taking on the business and the progress it has made since; with the company recently expanding its graphic design department and planning to add website design to its offerings. It also rents out space to an art supplies shop and an art gallery.

St. Johns Printing was founded by John Roundtree in 1978 as a basic copy shop, adding the Cartridge World franchise in 2007 to offer inkjet and toner cartridge refilling. 60-year-old Dreier decided to take it on after his sign company was bought out four years ago, noting that “all the businesses that were available were really too late [to save them]” but St. Johns Printing and Cartridge World “still had a heartbeat, and it had a wonderful story”.

The business has “developed a partnership with the city” of St. Augustine, and was the printer for its 450th celebration, working with the city to print banners for events.

Commenting on how the business has continued to diversify and “move into the digital world”, Dreier said: “You’re always looking for the next good mousetrap to stay competitive without having to reinvent the wheel […] we’re still growing incrementally and keep reinforcing our commercial base.”

Dreier added: “You can’t start a business like this today, but Mr. Roundtree built a really nice business […] we run like a little engine. It’s great.”

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Xerox creates 100 jobs in Pennsylvania

August 15, 2014

xeroxThe OEM has added the jobs at a call centre in Moosic.

The Times-Tribune reported on Xerox’s creation of 100 jobs in Moosic, Pennsylvania at a call centre for one of its healthcare clients, with both the temporary and permanent roles dealing with inbound calls related to both “health care and insurance”. The facility in Moosic currently employs around 250 people on behalf of its different clients.

The facility in Moosic also provides call centre outsourcing “for other companies”, with the hiring to take place until the end of September. The OEM’s spokesman Bill McKee stated that “the majority of the 100 new hires will be permanent”, with the temporary roles “project-based”, though many of the people hired for these roles “will have the opportunity to move into permanent positions”.

Xerox stated that candidates can apply online or in person at the facility in the town, and that it is also planning job fairs in the area. The Recycler reported earlier this week on Xerox’s cutting of 468 jobs in Texas.

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Xerox announces 468 jobs cut in Texas

August 12, 2014

The OEM has cut 468 jobs at a call centre in Houston.nr_Xerox_Square_Building_with_New_Logo_2008Jan7-prv

Your Houston News reported on the layoffs in Houston, which are “as a result of a change in business conditions” for one of Xerox’s clients. A Worker Adjustment and Retraining Notification Act letter was filed on 1 August with the Texas Workforce Commission, stating that the job cuts will be effective as of 30 September.

The workers at the Xerox Commercial Solutions site, working on behalf of Sprint Customer Care, were informed on 1 August about the layoffs, with 850 other employees currently still working for Xerox in Houston as part of 7,000 across Texas. In 2012, 2,200 staff worked for Xerox in Houston, with a fall of 1,350 staff in two years. 81 employees had been laid off last year at another call centre in the city.

Kevin Lightfoot, Vice President of Corporate Communications at Xerox, stated that “these reductions, while very difficult decisions, reflect the changing business requirements of a single client […] this was based on a client’s changing business requirements”. Noting that the company wil continue to have a presence in Houston, Lightfoot confirmed that separation packages “will be provided to those who qualify”, and employees can apply for other vacancies.

He added: “The changing demands of Xerox’s clients produce cycles of hiring. We continue to hire new employees in many locations and will continue to hire in Houston to meet the needs of other clients.”

In May 2013, Xerox cut 300 jobs in two call centres in Oregon, and in October 2013, it cut 500 jobs at a call centre in North Carolina.

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Parliamentary inquiry into UK remanufacturing announced

August 11, 2014

Caroline Spelman MP

Caroline Spelman MP

Call for evidence issued by inquiry into the growth potential of the UK’s remanufacturing sector; with final report expected before Christmas.

A joint inquiry by All-Party Parliamentary Groups for Manufacturing and Sustainable Resource, with the aim of examining the UK remanufacturing sector’s growth potential, has been announced, with a call for evidence issued and all submissions to be received by Friday 26 September.

The inquiry will be co-chaired by former Environment Secretary Caroline Spelman MP and Barry Sheerman MP and jointly conducted by the All-Party Parliamentary Groups for Manufacturing (APMG) and Sustainable Resource (APSRG); and will explore the barriers to the up-take of remanufacturing in key sectors, including WEEE (Waste Electrical and Electronic Equipment).

Following the APSRG’s March 2014 report, ‘Remanufacturing: Towards a Resource Efficient Economy’, which identified key growth opportunities and challenges facing the UK remanufacturing sector, the new inquiry will build upon the previous findings and explore ways in which lessons can be learned from best practice case studies in key industries and applied to remanufacturing sectors that are currently under-performing, such as WEEE.

The extent to which government policy is structured towards promoting remanufacturing growth will also be examined, along with how different businesses have successfully adopted remanufacturing processes into their business models. It will also consider the benefits of alternative types of business models, such as servitisation, in better supporting remanufacturing growth in the UK.

The final report will be issued before Christmas 2014 and will include recommendations for how thegovernment can further encourage the up-take of remanufacturing across sectors.

Commenting on the inquiry, Spelman said: “This new inquiry comes at a critical time. It is clear to us the importance of remanufacturing in terms of both resource security and economic potential is not yet fully appreciated by Parliamentarians or UK industry.

“The future of manufacturing is inextricably linked to environmental sustainability, reducing the consumption of virgin raw materials, and exploiting new areas of comparative advantage.

“We believe the government must do more – firstly to better understand the huge environmental and economic potential that remanufacturing offers, and secondly to create precisely the policy and regulatory framework needed in order for UK businesses to fully embrace it.”

Meanwhile, Sheerman added: “This inquiry allows us to ask detailed questions about how we can put remanufacturing at the heart of the UK economy. What are the barriers to take-up? How can they be addressed at local, national and international levels? What can government do? What can manufacturers do? What role can SMEs play in sparking small scale remanufacturing innovation?

“This inquiry is not about banging drums to prove the benefits of remanufacturing – the benefits are clear. This inquiry is about finding out what we need to do now and in the future to put a more resilient UK at the forefront of global remanufacturing innovation.”

The Recycler contacted UKCRA (UK Cartridge Remanufacturers’ Association) for a comment on the inquiry, with the association stating: “UKCRA views this ‘call for evidence’ as an important opportunity to bring to the government’s attention the cartridge remanufacturing industry, which has been at the vanguard of remanufacturing and self sustainability for over 30 years.”

How do you think this inquiry will impact UK cartridge remanufacturers? Email news@therecycler.com or leave a comment.

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Smart Wall Paint increases office collaboration

August 11, 2014

smart wall paintPaint transforms “any surface” into a whiteboard for collaborative working in offices and other spaces.

Smart Wall Paint, developed by a UK and Ireland-based company of the same name, has the ability to transform smooth surfaces into “write on/wipe-off whiteboard areas”, allowing for a new way of collaborative working in small and large businesses, as well as universities, government bodies and training organisations.

The paint, which is available in white or clear, allows for entire office walls to become whiteboards, enabling businesses to “optimise and de-clutter” the working environment as it eliminates the need for traditional whiteboards, flip-charts and paper; with the whiteboards used to visualise website designs, list agendas, and create mind-maps to help generate new ideas collectively.

The company stated that the product “improve[s] team work” and can be used “in board rooms and meeting rooms, in staff areas, on lockers, in corridors and even in staff cafes”, with the paint described as “low odour” and “non-toxic”. It also asserts that “no specialist skills [are] required to paint” with Smart Wall Paint, with the paint being “touch dry in five hours” and ready to use in five days.

The paint is compatible with laminates, painted surfaces, doors and cabinets, wall coverings and plaster; with the company stating that Google, Fujitsu, Tesco, Marks & Spencer, BT, Vodafone and Virgin all use Smart Wall Paint in their offices.

While the initial white Smart Wall Paint product was launched in November 2011, on the company’s website it states that two patents for a new dry erase coating technology have been applied for this year, as well as the company launching Smart Wall Paint Clear and the Smart Wall Paint Contractors kit in 1Q2014 and Smart Wall Paint Magnetic Primer in 2Q2014.

Have you discovered a product that has transformed the way that your business works or improved your business’ performance? Email news@therecycler.com.

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