Hewlett-Packard Co. (HPQ - Analyst Report) recently won a multi-year service contract renewal from infrastructure developer Black & Veatch, a 98-year old engineering, consulting and construction company, which serves clients across the energy, water, telecommunications, federal and security markets. Financial terms of the contract were kept confidential.
The renewed contract spans 6 years, thus extending the existing 7-year relationship. Till now, H-P was responsible for managing Black & Veatch’s information technology (IT) and applications environments. Henceforth, H-P will provide tools, technology and hardware support to help the company extend its geographical reach.
H-P’s services will include data centers, networks, computing devices, workplace, security and applications. Black & Veatch will deploy H-P’s services across its operating centers located in Argentina, India, Malaysia, Singapore, U.K. and the U.S.
Black & Veatch’s reliance on H-P came as a result of years of services that helped the company to remain competitive. The company believes that H-P’s services will be critical to its success in delivering solutions to meet the complex needs of its clients.
H-P’s proven technological expertise has helped its Enterprise Services arm to win deals continuously. In the past few months, H-P won service deals from Chinese aviation technology provider, TravelSky Technology Ltd.; the Department of Vermont Health Access, the U.S. Department of Homeland Security Department, the U.S. Army Human Resources Command and State of Indiana’s Department of Administration.
Despite frequent deal wins under the Enterprise Services Unit, the company’s financial performance has not been quite encouraging. In the recently concluded second quarter of 2013, the segment registered a year-over-year revenue decline of 7.6%. The overall decline was due to a delay in closing large deals and higher impact of low-performing accounts.
Further indication of PC market slump in 2013, declining revenues and competition from Dell Inc. are concerns. However, back-to-back product launches, continuous deal wins from different industrial sectors and growing exposure into the enterprise storage space are encouraging.
Currently, H-P has a Zacks Rank #2 (Buy). Other technology stocks that warrant consideration are CA Inc. (CA) and Rambus Inc. (RMBS - Snapshot Report), both carrying a Zacks Rank #1 (Strong Buy).