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Technology Stocks : Hewlett-Packard (HPQ) -- Ignore unavailable to you. Want to Upgrade?

To: Dave B who wrote (2908)	6/4/2003 2:57:31 PM
From: The Duke of URL©	Respond to of 4345

-------------------------------------------------------------------------------- Related Quotes Sym. Price Chg. ERICY Trade News 10.2 0.04 HPQ Trade News 21.03 0.96 Ericsson signs IT Outsourcing Contract with HP June 04, 2003 08:54:00 (ET) STOCKHOLM, Sweden, Jun 4, 2003 (BUSINESS WIRE) -- Ericsson today signed a five-year contract to outsource Ericsson's information technology (IT) infrastructure to HP (HPQ, Trade). HP will provide IT services for Ericsson's operations worldwide. The agreement will contribute to substantially reduce Ericsson's overall IT cost and achieve greater flexibility in resources and cost. The Memorandum of Understanding signed in April this year has now resulted in a contract. Under the terms of the agreement, HP will provide a range of services including: data center management, help desk support, and desktop service environment. The agreement covers Ericsson's IT operations worldwide in more than 100 countries. "Outsourcing of IT operations is part of Ericsson's ongoing changes within the IS/IT area, and its overall restructuring program aiming at radically reducing the operating expenses and cost of sales," said Per-Arne Sandstrom, deputy chief executive officer at Ericsson. "Technology should be evaluated in terms of the business value it delivers. The announcement with Ericsson reinforces the strength of our step-by-step collaborative approach that enables us to deliver a more flexible and adaptive IT environment while lowering the total cost of ownership for our customers, " said Carly Fiorina, HP chairman and chief executive officer. The agreement includes transfer of assets and about 1,000 employees globally at Ericsson Global IT Services to HP. The transition will begin in July, pending approval by competition authorities. IS operations, i.e. development, implementation and management of applications, is not included in the agreement with HP. Ericsson is shaping the future of Mobile and Broadband Internet communications through its continuous technology leadership. Providing innovative solutions in more than 140 countries, Ericsson is helping to create the most powerful communication companies in the world. Read more at ericsson.com SOURCE: Ericsson

To: Dave B who wrote (2908)	6/4/2003 5:39:15 PM
From: w0z	Read Replies (1) \| Respond to of 4345

"P/S doesn't mean anything." Not so Dave. P/S is always listed as a key valuation metric along with P/E and PEG. In fact, it is more commonly used for technology companies, where P/E tends to be a good rear view mirror. "Price to Sales Ratio The trouble with the P/E ratio is that earnings is a complicated "bottom line" number, sometimes reflecting non-recurring events; so many people look at sales revenue as a more reliable indicator of a company's size and growth. The Price/Sales ratio, also called the "PSR", is a company's stock price divided by its annual sales per share." moneychimp.com "P/E vs P/S For much of the late 1990s, the Price/Sales ratio was more important than the Price/Earnings ratio. And therefore, you needed to know the price/sales ratio of every stock you owned, by heart. Though the market is not always willing to focus on sales over earnings, it still happens when new companies have not yet achieved profitability. When that's the case, the P/S ratio is the best single indicator of what the market expects from the stock." briefing.com What is really important is the expected stream of future earnings, which is quite complex due to changes in total market growth, market share changes and profit margin changes. Given IBM's current share and profitability position, one must ask whether we expect them to grow earnings faster than HPQ can from a much lower starting position. As HPQ is beginning to deliver, the market is beginning to realize it may be a much better value than IBM: siliconinvestor.com Over time, I expect HPQ's valuation will trend up and IBM's will trend down since they are both in the same industry with roughly similar size and product offerings. Fund managers tht want representation in this industry have to look at the relative valuations and seem to be concluding that HPQ's valuation is a relative bargain compared to IBM.