News of cash return revives HP(NYSE:HPQ) - MS, AAPL, 005930, 0992

Northern, WI 03/19/2013 (avauncer) - Morgan Stanley (NYSE:MS) down by 2.45% to close at $22.99 upgraded Hewlett-Packard Company (NYSE:HPQ) shares up by 2.93% to close at $22.83 after having cited that the company has the potential to return more of its cash to its investors. HP rose to its highest price in a 10-month period and has gained 60 percent this year. The computer giant is slated to generate a free cash flow of close to $6.7 billion in the 2013 financial year. This will be close to 35 percent higher than the company forecast of $5 billion. Meg Whitman, the Chief Executive Officer has been on a warpath to revive the company growth amidst a very bleak computer market sales scenario and restructuring may eventually lead to $2.2 billion worth of savings by the end of the next fiscal year.

Stiff competition
There is a definite possibility of cash returns in the form of either a higher dividend or a buyback. The market expectation is that without taking revenue growth into consideration, Hewlett-Packard Company (NYSE:HPQ) is expected to grow free cash flow and earnings per share over the next three years. Personal computers are the core HP business which has been shrinking as a larger number of people are moving to smartphones and tablets manufactured by Apple Inc (NASDAQ:AAPL) up by 2.72% to close at $455.72 and Samsung Electronics Co., Ltd (KRX:005930) up by 2.77% to close at $1,485,000.00.

In addition to this the company has had to deal with competition from Lenovo Group Limited (HKG:0992) up by 0.66% to close at $7.57 who manufactures lower priced computers. Cloud computing is gaining more demand which has been affecting the HP business badly. Last September, Whitman had announced that the company will be downsizing its workforce by 29,000.