(Technology Review) – The popularity of Unmanned Aerial Vehicles or UAVs has exploded in just a few years. That’s the result of smaller, cheaper computers that allow these vehicles to fly unaided, better radio communication systems and more efficient, lighter motors for longer flight times.

As a result, UAVs are extraordinarilly capable. The flying machines available in any toyshop for a few hundred dollars would have been the envy of any UAV research team just ten years ago.

But there are still limits to what these machines can do and one of them is tracking objects on the ground. Send up one of these cheap UAVs to circle your house or to follow a car and it’ll be hopelessly lost in seconds.

That’s because object recognition tends to be a computationally intensive task and there are obvious power and weight  limits for small flyers.

The standard way to solve this problem is to broadcast the images back to the ground where they can be crunched relatively easily and then sent back. But this obviously doesn’t work when communications systems are disrupted.

So today Ashraf Qadir and pals at the University of North Dakota in Grand Forks reveal a solution. With Department of Defense funding, these guys have built their own image processing machine, which is small and light enough to be carried by a small UAV. They say their device is capable of tracking objects such as cars and houses in real time without the need for number crunching on the ground.

The way these guys have solved this problem is to simplify it and then solve the simplified puzzle. They point out that from a plane, objects on the ground such as cars and houses do not generally change shape.

However, they do change their orientation and position relative to the camera.  So their object-tracking program essentially solves just these two problems. First , it uses the motion of the object in the previous frames to predict where it is going to be in the next frame. That’s fairly straightforward.

Second, it uses a remarkably simple process to follow the object as it rotates. When the onboard computer first finds its target, it uses a simple image processing program to creates a set of images in which the object is rotated by 10 degrees. That produces a library of 36 pictures showing the object in every orientation.

So the process of following  the target is simply a question of matching it to one of those images. Qadir and co have developed a simple protocol to optomise this process.

And that’s it. They’ve tested the approach both in the lab and in the air using a Linux computer on a single printed circuit board plus a small camera and gimballing system. All this is carried on board the university’s customised UAV called Super  Hauler with a wingspan of 350 centimetres and payload capability of 11 kilograms.

These guys say the system worked well in tests. The UAV has an air-to-ground video link which allows an operator to select a target such as a car, building, or in these tests,  the group’s control tent. The onboard computer then locks onto the target, generates  the image library and begins tracking.

From an altitude of 200 metres or so, Qadir and co say the system works well at frame rates over 25 frames per second–that’s essentially real time..

Of course, the systems has some limitations. Following a single vehicle is obviously much harder than selecting and following one of many in traffic, for example. Similarly, station keeping over a single tent in a field is relatively straightforward compared to the same problem in suburbia where all the houses look the same.

But one step at a time, as they say. These are problems for the future.

These guys have a proof-of-principle device that could easily be deployed cheaply and more widely. The Super Hauler isn’t quite in the ‘toy’ department yet but it isn’t hard to imagine how a version of this kind of software and hardware could be deployed in cheap UAVs elsewhere in the near future.

The Department of Defense obviously has its own uses for this kind of gear but for the rest of us it boils down to stalking. All of a sudden, it won’t be so hard to follow your boyfriend’s car when he says he’s going to the game or station keep over your girlfriend’s house when she says she “needs time to herself”. Gulp!

(Reuters) – Opera Software would cost Facebook over $1 billion as competition from Google and others could push up the price tag, analysts said on Tuesday, as takeover talk pushed the shares up as much as 26 percent on Tuesday.

Oslo-listed Opera, coveted for its advanced mobile phone software technology, would be a perfect fit for Facebook but the firm’s business is also vital for some of the industry’s biggest players so any bid is likely to attract others to the table.

“Opera would be sensible for Facebook on several levels,” Arctic Securities said.

“It would enhance the now limited mobile experience of Facebook, improve Facebook’s mobile monetization problem, help Facebook retain online game developers leaving the social network over the lack of a mobile platform and further improve Facebook’s ability to target ads.”

Opera makes various web browsers that work across an array of platforms including mobile phones, tablets, PCs, and TVs.

The software is available on most phones, including the iPhone and the BlackBerry, and works on various operating systems, including Android, giving Opera the reach Facebook is seeking.

The browser can compress data by as much as 90 percent, saving consumers on data charges, and has the technology to better display ads, a key factor for Facebook which has struggled to convert its rapidly increasing traffic from mobile platforms to revenue.

Opera, which has about 200 million Mobile and Mini subscribers, has also built a significant market share in key emerging markets, such as India, Brazil and Asia, where Facebook has been generally weak.

$1 BILLION PLUS?

It would be such a perfect fit for Facebook, analysts said it would have to pay a hefty premium.

DNB, Norway’s top bank, said the price would have to be double Friday’s closing level, or 68.6 crowns, valuing the firm at $1.35 billion, while Danske Bank and ABG Sundal Collier both predicted a price between 50 and 60 crowns a share, or between $1 billion and $1.2 billion.

At 1139 GMT, the stock traded up 17.2 percent at 40.2 crowns a share, valuing the firm at around $800 million.

Opera officials have repeatedly declined to comment.

However, Chief Executive Lars Boilesen last October said he would “love to” further cooperate with Facebook.

“We are already Facebook’s platform of distribution in emerging markets like Africa and India. A big part of the Opera Mini traffic is from Facebook. So we are already their channel in these markets,” he said in October.

“We would love to cooperate with Facebook, but the same goes for Google and everyone else. There are no limits here, because we are the leading mobile client in these markets,” he added.

OBSTACLES

Still, several obstacles remain.

Opera founder and top shareholder Jon S. Von Tetzchner said the firm should focus on organic growth.

“I want Opera to focus on growth and delivering good results; there are big opportunities for Opera,” Tetzchner, who holds 10.9 percent of Opera told Reuters. “We have been promised 500 million users by 2013 and I think that’s a good goal and the firm should keep going for it.”

“I personally think that an ARPU (average revenue per user) goal of $1 is even modest,” he said. “I am not pushing for a takeover.”

Tetzchner said he was not aware of a bid and had not decided how he would react to one but added it would be “undemocratic” for him to try to block it if others supported it.

Another obstacle could be Google, which has extensive relationships with Opera.

“A takeover by Facebook will likely send cold water down Google’s spine,” Arctic Securities said.

Google is Opera’s default search partner for Opera Mini and Opera Mobile worldwide outside Russia/CIS, making the firm a key relationship for Google.

(Editing by David Cowell)

(Reuters) – Japanese trading house Marubeni Corp is to buy U.S. grains merchant Gavilon for $3.6 billion, the company said on Tuesday, as it targets China’s growing demand for corn from North America, the world’s top grain export hub.

China’s corn purchases are expected to surpass Japan’s annual imports of about 16 million metric tons (17. 6 million tons), the world’s largest, within as little as three years, analysts say. China is already the world’s top importer of soybeans.

“It’s a move to complete a grains-supply chain of elevators, export terminals, freight handling and an end-user market, and the target is the growing market of China,” said Akio Shibata, president of the Natural Resource Research Institute in Tokyo.

The U.S. grain trader has about $2 billion in debt, Marubeni said, which would take the total value of the transaction to $5.6 billion. The acquisition would be partly financed by bank borrowing, the Japanese firm added.

The announcement confirmed an earlier Reuters report.

It is the largest overseas acquisition, including debt, in agriculture or energy by a Japanese company since Japan Tobacco bought British cigarette manufacturer Gallaher Group for almost $19 billion in 2006, according to Thomson Reuters data.

Marubeni, Japan’s fifth-largest trading company, had been in advanced talks to buy Gavilon since early May. Gavilon is the largest transaction in Marubeni’s history, the company said.

Marubeni expects its global grain handling to rise to 55 million metric tons in the year to March 2013, when it adds Gavilon’s 30 million metric tons to its business, coming closer in size to global grain giants like Cargill, Daisuke Okada, an adviser on food products to Marubeni President Teruo Asada, said at a briefing in Tokyo.

“We expect U.S. grains will fill future supply gaps in corn and other grains in China as output growth there may slow due to problems including water shortages,” Okada said.

The company also said it expected the acquisition to lift its bottom line by more than $100 million from next year.

Acquiring Gavilon, whose owners include billionaire investor George Soros and hedge fund manager Dwight Anderson, may help the trading house challenge Archer Daniels Midland as the biggest supplier of grains and oilseeds from the United States to China.

“This acquisition supports an ongoing strategic plan by Asian grain importers to better secure future grain needs via the merger and acquisition process,” said grains analyst Mike Zuzolo of Global Commodity Analytics.

“Realizing that better supply-chain management should better prepare these importers in their global sourcing needs.”

Japan’s trading houses, or “sogo shosha”, have been scooping up assets around the world, targeting everything from shale gas to copper, as the world’s third-largest economy competes with China, the second-biggest, for resources.

GOOD FIT

Gavilon is the third-biggest U.S. grain merchant in terms of the size of its marketing network, behind Archer Daniels and Cargill and also has large energy and fertiliser trading assets.

Gavilon now has about 320 million bushels of storage in the U.S. putting it ahead of global grain giants like Bunge Ltd and Louis Dreyfus.

“As part of a larger trading organization, Gavilon will be well-positioned to more efficiently connect supply with growing global demand,” Gavilon President and Chief Executive Officer Greg Heckman said in a statement.

Marubeni’s acquisition of Gavilon is unlikely to face any pushback from farmers and agricultural businesses, which have long been accustomed to the presence of Japanese grain companies in the United States.

“We anticipate minimal changes to our organization and operations,” Heckman said.

A combination of Marubeni and Gavilon is seen by analysts as a good commercial fit, marrying Gavilon’s presence in the U.S. Central Plains and Midwest with Marubeni’s operations in the Pacific Northwest – the shortest U.S. sea route to Asia.

Gavilon also has a large footprint in the U.S. fertilizer market, an energy operation that includes 7 million barrels of crude oil storage and an oil, grain and ethanol trading unit.

Morgan Stanley is advising the U.S. company on the transaction, Gavilon said. Nomura is advising Marubeni, people involved in the discussions have said.

Marubeni’s rivals Mitsui & Co and Mitsubishi Corp had both been seen as potential bidders for Gavilon but decided not to pursue a deal.

Japan’s outward bound mergers and acquisitions totaled $25.4 billion, including debt, this year to date, versus $15.1 billion for Chinese overseas purchases, according to Thomson Reuters data.

There were 245 overseas purchases or investments by Japanese companies compared with 101 for those from China.

Large trading houses in Japan have more than doubled overseas acquisitions, investing $7.7 billion so far this year, up from $3.5 billion in the same period in 2011.

Marubeni said in 2009 it signed a letter of intent with Sinograin, a Chinese state firm, to “work closely in coming years” to build state reserves and commercial grain supplies.

In the next marketing year that starts in October, the market is expecting a 60 percent jump in China’s corn imports to around 8 million metric tons.

In part, the shosha may be betting that Japanese companies can make in-roads where China’s state-owned traders fear to tread.

Late last year, Chinese state-owned trading house COFCO said it was seeking acquisitions to secure supplies in the United States, Australia, Russia and South America. But it has not advanced any major purchases, although it has sent teams to various countries for discussions, sources said.

Beijing-backed firms have shied away from attempts at large U.S. takeovers since a political furor scuppered offshore oil driller CNOOC’s bid for Unocal seven years ago, analysts say.

Marubeni is already the second-largest exporter of U.S. grains to China, with soybean shipments surging five-fold since 2008, based on data from trade intelligence firm PIERS. Marubeni handled nearly 20 percent of China’s soybean imports in 2010, according to its annual report.

Unlike Marubeni, Gavilon has not made deep inroads into China, having exported less than 10,000 metric tons of grains over the past two years, data showed.

Marubeni is the best-established shosha inside the U.S. grain belt. In 2010, it overtook Japan’s national federation of farm cooperatives Zen-noh as the biggest Japanese exporter of U.S. grains and oilseeds, according to PIERS data, and accounts for more than a third of all shipments by Japan-based firms.

(Additional reporting by Soyoung Kim in New York, K.T. Arasu in Chicago and Risa Maeda in Tokyo; Editing by Aaron Sheldrick and Alex Richardson)

(Reuters) – Stocks rose more than 1 percent on Tuesday on hopes China may unleash more spending measures and Greek election polls pointing to support for pro-bailout parties.

The Dow Jones industrial average .DJI gained 134.71 points, or 1.08 percent, to 12,589.54. The Standard & Poor’s 500 Index .SPX rose 14.15 points, or 1.07 percent, to 1,331.97. The Nasdaq Composite Index .IXIC added 33.97 points, or 1.20 percent, to 2,871.50.

(Reporting By Edward Krudy, editing by Dave Zimmerman)

(Reuters) – Dell Inc is in talks to buy Quest Software Inc, the network security software maker that had earlier agreed to be acquired by Insight Venture Partners for $2 billion, Bloomberg reported, quoting sources.

Quest shares were up 5 percent at $26.45 in early trading on Friday on the Nasdaq.

Shares of the company, which now has a market value of $2.12 billion, gained more than a third of their value after Insight Venture’s offer.

Quest said earlier this month it had received multiple alternative proposals during its go-shop period following the offer from the private investment firm.

Dell has been seen by analysts as one of the possible bidders for Quest, whose backup and security software offerings would complement Dell’s product portfolio.

Faced with falling PC sales, Dell has been diversifying its revenue base, giving up low-margin sales to consumers and moving into higher-margin areas, such as catering to the technology needs of small and medium businesses in the public sector and the healthcare industry.

Analysts have also named BMC Software Inc, CA Inc, Microsoft Corp and Oracle Corp as other potential bidders.

Quest has retained Morgan Stanley as its adviser.

The company, whose products include software that monitors the flow of data through networks, is led by Chief Executive Vinny Smith, who took over in February after Doug Garn stepped down citing poor health.

When contacted, a Dell spokesman said the company does not comment on rumors or speculation. Quest Software could not be immediately reached for comment.

Dell shares were up 1 percent at $12.58 on the Nasdaq.

(Reporting by Supantha Mukherjee in Bangalore, Jennifer Saba in New York; Editing by Saumyadeb Chakrabarty)

(Reuters) – U.N. nuclear inspectors have found uranium traces in an Iranian underground site refined to a somewhat higher level than the enrichment work normally done there, but still well below the weapons-grade threshold, diplomatic sources said on Friday.

One source said the higher level detected at the Fordow site – where Iran has declared it is refining uranium to a fissile concentration of 20 percent only – was believed to be between 20 and 30 percent, making clear this was not a big difference.

“It is not up there … towards nuclear weapons capability,” the diplomat said. It could simply be a production glitch, but the U.N. nuclear watchdog had asked Iran to clarify the issue, since the agency is tasked with ensuring member states do not “weaponize” the enrichment process.

Iran started enriching to 20 percent in 2010 and has since sharply expanded the work, saying the material will serve as fuel for a medical reactor. But a suspicious West is alarmed since such enhanced enrichment accomplishes much of the technical leap towards 90 percent – or weapons-grade – uranium.

Another diplomatic source said he had also heard of the find but it was unclear whether it would be included in an IAEA report due to be released to member states later on Friday. The IAEA regularly inspects Fordow and other Iranian nuclear sites.

“My understanding is that the IAEA had found a particle or had tested a sample that had uranium enriched at a higher rate than had been declared at that facility,” the first source said of the find at Fordow.

Enriched uranium can be used to fuel power plants, which is Iran’s stated purpose, or provide material for bombs, if refined to a much higher degree, which the West suspects may be Iran’s ultimate goal. The Islamic Republic denies that.

U.S. proliferation expert David Albright said he believed it was a production error that caused the higher-enriched uranium trace at Fordow. “Nonetheless, (it is) embarrassing for Iran,” Albright said by telephone from Washington.

He said the centrifuge cascades – interlinked networks of enrichment machines – at Fordow had 17 stages instead of 15 as in the old design.

“An effect is to overshoot 20 percent when 3.5 percent LEU (low-enriched uranium) is fed into the tandem cascades at the rate used for the 15-stage cascade,” he said.

But, “this process of moving to 17 stages also reflects a reconfiguration of the cascades that can make (a nuclear weapons) breakout easier,” Albright added.

(Editing by Mark Heinrich)

(Reuters) – Consumer sentiment rose to its highest level in more than four years in May as Americans stayed optimistic about the job market, while higher income households expected to see bigger wage increases, a survey released on Friday showed.

The Thomson Reuters/University of Michigan’s final reading on the overall index on consumer sentiment rose to 79.3 from 76.4 in April, topping forecasts for 77.8 and an initial May reading of the same.

It was the highest level since October 2007.

“Unfortunately, consumer confidence is still extremely vulnerable to a reversal, as occurred in the past two years,” survey director Richard Curtin said in a statement.

“While their most optimistic expectation for job growth could go unfulfilled without much harm, if the recent slowdown in job growth persists in the months ahead, it could form the basis for a third retreat in confidence.”

Half of all consumers said the economy had improved during the past year, while buying plans for vehicles and household durables also improved. The gauge of buying plans rose to 132 from 126.

Higher income households anticipated a 2 percent income increase in the year ahead, while lower income households expected just a 0.3 percent gain.

The survey’s barometer of current economic conditions jumped to 87.2 from 82.9, while its gauge of consumer expectations improved to 74.3 from 72.3.

The indexes were at their highest levels since January 2008, and July 2007, respectively.

The survey’s one-year inflation expectation eased to 3.0 percent from 3.2 percent, while the survey’s five-to-10-year inflation outlook dipped to 2.7 percent from 2.9 percent.

(Reporting By Leah Schnurr; Editing by Chizu Nomiyama)

(Reuters) – Chinese President Hu Jintao has demanded senior Communist Party officials stifle tensions over the ousting of ambitious politician Bo Xilai and show unity as they prepare for a change of leadership, sources briefed on recent meetings said.

Hu urged the party to close ranks at a meeting of about 200 officials early this month at a Beijing hotel, declaring the downfall of Bo – China’s biggest political scandal in two decades – to be an “isolated case”, the three sources said.

The sources’ comments represent the first confirmation of speculation that Hu recently intervened to prevent a wider rift in the party and to resist pressure from some elements for a wider purge of the populist Bo’s policies and supporters.

Bo, former party chief of Chongqing city, was suspended from the party’s top ranks in April after his wife became a suspect in the murder of British businessman Neil Heywood. Before the scandal broke, Bo had been seen as a candidate to join China’s new top leadership team to be unveiled this year.

“It’s been settled that this will be dealt with as a criminal case, not a political case,” said one of the sources, a retired official. “The central leadership wants to focus on ensuring a stable environment for the 18th Party Congress, so the guiding policy is to end all the rumors and contention.”

The party congress, scheduled to be held late this year, will appoint a new generation of leaders. Hu and Premier Wen Jiabao will then step down from their government posts at the National People’s Congress in early 2013, when Vice President Xi Jinping is likely to succeed Hu as president.

The sources, all with ties to senior party officials, spoke on condition of anonymity to avoid possible recriminations for speaking about internal party discussions.

Two of them said Hu had convened this month’s meeting at the Jingxi Hotel, the party’s heavily guarded conference hotel in western Beijing where leaders often hold secretive conclaves.

The meeting was part of a series of steps taken to shore up unity and advance preparations for the 18th Party Congress. Those steps included retired leaders, especially former president Jiang Zemin, giving their backing to Hu’s position.

“Jiang said that if you have solid evidence that Gu Kailai committed murder and that Bo Xilai also committed major errors, then deal with it as an isolated criminal incident,” said the retired official, paraphrasing a summary of Jiang’s comments.

“There’s already been too much instability. The overriding goal now must be a successful 18th Party Congress,” the former official said, paraphrasing Jiang, 85, who a decade after he retired still exercises some influence over major decisions. One of the sources said Jiang was not at the Jingxi meeting and it was unclear where he made the remarks or how he conveyed them.

Hu’s expected successor, Xi, also has stayed closely in line with the leadership’s position on Bo, said the retired official.

IDEOLOGICAL RIFTS, RUMOURS

Describing Bo’s downfall as a serious but isolated case of wrongdoing, Hu urged officials at the meeting to end ideological rifts and rumors ignited by the scandal, the sources added.

The domestic security chief, Zhou Yongkang, has faced accusations that he sought to protect Bo, but his career appears to have survived the controversy, despite rumors that Zhou could be sidelined.

“Zhou has been encouraged by the party leadership to make regular appearances and show he’s trusted,” said the retired official. He noted that Zhou and President Hu made a high-profile joint appearance before police on May 18.

Premier Wen had suggested he favored a wider reckoning in March when, a day before Bo was sacked as Chongqing party chief, the premier linked Bo’s failings to the discredited radicalism of the Cultural Revolution.

But at the recent party meetings, Wen’s comments were chided by some other officials, two of the sources said.

However, China’s leaders could find enforcing demands for conformity from the public harder than from within the party.

Bo nurtured an ardent following among leftists who embraced what they viewed as his model of egalitarian growth, and they have continued to defend him as the victim of a plot. He had used Chongqing, a province-level municipality in southwest China, as a showcase for left-leaning populist policies.

Liberal reformers, however, want the government to look beyond Heywood’s death and examine complaints about Bo’s leadership, including accusations that his populist crackdown on organized crime in Chongqing involved abuses such as torture.

He was brought down after a furor erupted when his police chief, Wang Lijun, fled to a U.S. consulate for more than 24 hours in February and told American diplomats that he believed Bo’s wife, Gu Kailai, was implicated in Heywood’s death in November, according to later descriptions of Wang’s allegations.

“The leadership won’t turn this into a line struggle,” independent politics researcher Chen Ziming said, using the party’s jargon for an ideological purge.

Beijing-based Chen, who has sources close to the party, said there appeared to have been heated internal debate over how to handle the Bo case before deciding to contain it.

“The drama is focused on the three actors, and that’s already complicated enough,” Chen said, referring to Bo, his wife Gu, and the ex-police chief Wang.

“If there are more actors brought into the drama, then it will become just too complicated and troublesome.”

Bo, 62, and Gu, 52, have disappeared from public view and have had no chance to respond publicly to the allegations.

OUT OF SIGHT

The make-up of the next central leadership elite will be settled over coming months through an opaque process of inspections, jockeying and balancing rival camps in the party.

In recent weeks, the party has launched informal ballots and inspections to size up potential candidates for promotion into the Central Committee, which has about 200 full members, and the Politburo, a more powerful body with about two dozen members, the three sources said.

The Politburo Standing Committee, the core decision-making body, is chosen from the Politburo. The standing committee currently has nine members.

“Now they’re going from province to province to examine officials and settle on possible candidates for the next leadership,” said Chen, the researcher.

In China’s top-down politics, final decisions rest with a handful of leaders, but the results of these assessments can sway deliberations, he said.

The informal polls would serve as a basis for discussions when the leaders head to summer villas in coastal Beidaihe in July or August, when the new succession lineup would be firmed up, said one of the sources who spoke on condition of anonymity.

(Editing by Brian Rhoads, Don Durfee and Mark Bendeich)

(Reuters) – Europe’s second-highest court will rule on June 27 whether EU regulators were justified in fining Microsoft 899 million euros ($1.1 billion) four years ago for failing to comply with an antitrust ruling intended to make business easier for its rivals.

The European Commission imposed the fine – a record at the time – after the U.S. software group failed to provide information to firms with competing products, as had been ordered by the EU watchdog in 2004.

The penalty was the first imposed by the EU regulator for non-compliance with an antitrust decision.

The Luxembourg-based General Court of the European Union will issue its ruling next month, the court’s website showed on Thursday.

Microsoft’s lawyers argued during a court hearing in May last year that the fine was excessive and undeserved.

A lawyer for the Commission compared the company to a gambler who had lost a bet and then wanted his money back.

The EU executive imposed a 497 million euro fine on Microsoft in 2004 for abusing its dominant position to block competitors.

The case is crucial to other companies challenging big regulatory fines. Intel Corp is set to argue its case before judges from July 3-6 in a bid to overturn its 1.06 billion euro penalty levied by the Commission in 2009.

Intel’s fine is the largest ever in the European Union for a single company. EU regulators said the firm used anti-competitive tactics against smaller rival Advanced Micro Devices Inc.

(Reporting by Foo Yun Chee; Editing by Rex Merrifield and Mark Potter)

(Reuters) – Analysts said Hewlett Packard Co’s plan to cut jobs was a step in the right direction but the PC maker will have to do more to regain investors’ confidence.

Shares of the world’s No. 1 personal computer maker were up 6 percent at $22.26 in early trading on the New York Stock Exchange on Thursday.

“While we certainly don’t believe HP has resolved all their issues, we do see the company moving in the right direction,” RBC Capital Markets LLC analyst Amit Daryanani wrote in a note to clients.

The accelerating popularity of mobile computing devices such as Apple Inc’s iPad has been eroding PC sales for years and a downturn in the European markets has just added to the pressure.

Rival Dell gave a disappointing revenue forecast Earlier this week that spurred fears that global tech spending is weakening faster than anticipated.

HP said the layoff of 27,000 workers, or 8 percent of its workforce, would be made mainly through early retirement and would generate annual savings of $3 billion to $3.5 billion as it exits fiscal year 2014. The company employs more than 300,000 people globally.

Hewlett Packard, which also posted a second-quarter profit above market estimates, said it expects to use the cost savings from job cuts to drive organic growth.

“The market will likely want to see that the savings are real and tangible in the bottom line before they are diverted to other things,” Nomura Equity Research analyst Richard Windsor said in a research report.

“When one has little faith in a management team, there will be little hope that these savings will ever be properly realized as they will never be properly visible,” Windsor said.

At least three brokerages raised their price targets on the stock on Thursday.

Analysts said it may be too early to predict a sustainable turn, given the deterioration of demand in Europe and secular pressures in many of HP’s businesses into the second half of the year.

“We believe many of HPQ’s further risks stem from inconsistent operational execution and recent large acquisitions, which combined with aggressive buy-backs have weakened its balance sheet,” said Evercore analyst Rob Cihra.

Rival Dell has been diversifying its revenue base in the face of weakened consumer demand, giving up low-margin sales to consumers and moving into higher-margin areas, such as catering to the technology needs of small and medium businesses in the public sector and the healthcare industry.

Analysts, however, prefer HP over Dell saying the PC maker’s revenue and margins growth will take too long to play out, whereas HP’s restructuring will likely help the stock over the next few quarters, despite weak revenue.

(Reporting by Supantha Mukherjee in Bangalore; Editing by Joyjeet Das, Saumyadeb Chakrabarty)