HP Flush with Cash, Decides to Buy 3COM

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With all of the disappointing talk surrounding the economy in the past year, it’s heartening to see companies pulling profits, as it might be a sign that everyone can stop complaining about how dire the situation is and, just maybe, start cheering a little bit.  HP is certainly finding themselves in the latter group — having posted fourth fiscal quarter results today, they’re reporting that they’ve seen an eleven percent rise in profits over the same period last year.  That’s gotta be some good news, right?  HP has also raised its fiscal Q1 2010 and FY 2010 outlooks slightly, expecting to bring in somewhere around $119 billion for the whole year – a rise over previous expectations of a full billion dollars. 

 

Those profits are being driven right back into the company, however, with the purchase of networking giant 3Com.  At a price of $7.90 per share, the transaction values the smaller company at roughly $2.7 billion.  HP expects the move to help them advance their data center technologies and capabilities; Dell better look out – given their slump in sales, they’ve made large pushes in the enterprize and data center / virtualization arenas.   As the Red Queen says, you have to keep running just to stay in one spot, and HP seems to be sprinting right along.

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