Back to top

Analyst Blog

Hewlett-Packard Company (HPQ - Analyst Report) recently announced that it has resolved a patent infringement lawsuit pertaining to ink cartridges with Rio Branco Ltda. HP had sued Rio Branco in April last year.

Rio Branco Ltda., is a Brazilian distributor of Maxprint brand cartridges that are compatible with H-P printers. H-P had sued the Brazilian distributor over importing and selling the HP-compatible cartridges in Brazil.

Following the settlement, H-P's patents remained valid, and Rio Branco will no more be selling Maxprint cartridges. Maxprint will have to sell its inventory by December 1. Maxprint is also going to pay some of the litigation costs incurred by H-P.

However, H-P is exploring other channels to strengthen its presence in the Brazilian market. Some companies such as Canal Verde, Edeltec, Suprijet have confirmed that H-P's patents are valid and they have agreed to stop selling products that infringe upon H-P’s patents.

However, HP’s printing business continues to see many challenges, stemming mainly from macroeconomic concerns and secular changes in the printing market. While Lexmark’s (LXK) exit from the printing business could improve chances of share gains, this is not likely to be meaningful in the long term, as the inkjet market continues to shrink due to the easy availability of mobile media devices such as tablets and smartphones, which are reducing the need for taking printouts. Margins in the services business are also likely to remain weak this year.

The company is in dire need of rebounding, as it is constantly losing profit and market share. HP is implementing various strategies to generate growth. As discussed, the company is implementing some major restructuring actions to manage costs, drive growth and improve the health of its balance sheet.

Currently, the company retains a Zacks #3 Rank (Hold).

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%