H-P, AHRC Renew IT Services Deal - Analyst Blog
20 März 2013 - 12:50PM
Zacks
Hewlett-Packard
Co.’s (HPQ) Enterprise Services unit received two task
orders from the U.S. Army Human Resources Command (AHRC) for an
undisclosed sum. The task orders require H-P to continue providing
information technology (IT) services to improve the agency’s
recruitment procedure and overall departmental operations in a
cost-effective manner. The U.S. agency has been assigned the task
of managing careers of potential army soldiers.
Under the first task order, H-P will continue to manage IT
infrastructure for AHRC with the help of its data center services
for another three years. H-P has been providing this support since
past 20 years. The data center service includes support for
hardware (PCs, laptops and printers), networking, enterprise
architecture and help desk. The new task order would also require
H-P to extend its services for the U.S. Army Cadet Command and Army
Recruiting Command, in addition to AHRC.
Under the second task order, H-P will help AHRC in
hiring/recruiting personnel through its Applications Services. With
this service, AHRC can manage applications from prospective
candidates and select suitable candidates for the job. The service
also allows AHRC to simplify the process of online
applications.
Last week, H-P’s Enterprise Services unit was chosen by the U.S.
Department of Homeland Security Department to provide call-center
support for its U.S. Citizenship and Immigration Services (‘USCIS’)
arm. The 5-year task order was valued at $220.5 million.
Though deal wins under the Enterprise Services unit is pretty
frequent, the segment’s financial performances are not encouraging.
In the recently concluded first quarter 2013, the segment
registered a year over year revenue decline of 7.0%. But during the
call, H-P mentioned that it will continue to focus on strategic
enterprise services business, which includes cloud, application
modernization, security and information management, and analytics.
We find H-P’s commentary encouraging and believe that the
continuous deal wins will lead to better growth prospects for the
segment.
Though further indication of PC market slump in 2013, declining
revenues and competition from Dell Inc. (DELL) are
concerns, back-to-back product launches and growing exposure into
enterprise storage space are encouraging.
Currently, H-P has a Zacks Rank #2 (Buy). Other technology stocks
that warrant consideration are Symantec Corp.
(SYMC) and Synopsys Inc. (SNPS).
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