Venture

Venture: HP fell 13% to US$14.91 in New York, its lowest close since Nov ’02, after its CEO forecast 2013 profit that missed estimates and said a turnaround at the co won’t happen anytime soon. HP has long been viewed as a significant client for Venture, and likely contributes a significant part of Venture’s print & imaging revenues which accounted for 16% of 2Q12 group revenue. Citi also had a note out yday citing “some worries on 2H12”. Says weaker export trends across the region in 3Q, and declining electronics exports (-11% yoy) for Spore, indicate weaker trends for Venture, especially for 3Q12. Believes the data are proxies for Venture’s industrial pdts. The house continues to like Venture (Buy, TP $8.56) for its attractive near 7% div yield, but notes further dampening of its earnings in FY12 could lead to investors shifting to other yield stocks with a more certain near term earnings outcome.