Mystery about HP's new CEO seen eclipsing numbers
San Francisco — Hewlett-Packard Co. is scheduled to report its fiscal fourth-quarter results on Monday, Nov. 22. The following is a summary of key developments related to the period.
OVERVIEW: HP's results have taken a back seat to the company's management turmoil. The company's new CEO, Leo Apotheker, hasn't been seen in a public forum since starting the job on Nov. 1, possibly a result of the fact Oracle Corp. is trying to track him down and force him to testify in an industrial espionage trial against his former employer, SAP AG.
HP has refused to accept the subpoena on Apotheker's behalf and accuses Oracle of harassing Apotheker. As long as he doesn't come within 100 miles of the Oakland federal courthouse while the trial is going, Oracle can't force him to testify. HP has refused to disclose Apotheker's travel plans.
The mystery surrounding Apotheker's whereabouts, and the controversy about the circumstances of his predecessor Mark Hurd's ouster, have eclipsed coverage of HP's financials since Hurd suddenly resigned Aug. 6 in the wake of sexual harassment allegations.
HP is in the midst of a massive transformation, from a company that makes primarily personal computers and printer ink into a clearinghouse for all kinds of information technology goods, including computer-networking equipment and technology services. The shift has put HP more squarely into competition with IBM Corp.
HP's latest few quarters are particularly significant because they are a referendum on how well HP is executing on the strategy that Hurd designed and Apotheker inherited. HP is the world's biggest technology company by revenue. It is the world's largest seller of PCs and printers.
Some hallmarks of Hurd's time at HP were big acquisitions and severe cost cuts. He cut some 50,000 jobs over 5 years. The responsibility now falls to Apotheker to prove to Wall Street that HP is meaningfully improving its finances because of the changes. Some analysts worry about HP's ability to pump up its revenue organically, without acquisitions. Hurd is now a co-president at Oracle.
BY THE NUMBERS: HP is expected to have earned $1.27 per share on $32.75 billion in revenue, according to a poll by Thomson Reuters. A year ago, the company earned $1.14 per share on $30.78 billion in revenue.
ANALYST TAKE: "We expect investors to focus more on what the new HP would look like under Leo Apotheker," analyst Amit Daryanani with RBC Capital Markets wrote in a recent note to investors. "In-line fundamentals will likely carry less weight this time given concerns about what HP's future strategy will be under new leadership."
Investors have some clues about what to expect from HP. On Thursday, a rival, Dell Inc., reported higher profit on lower component prices. But sales fell short of analyst expectations, fueling sentiment that hard times for the computer industry haven't passed.
STOCK PERFORMANCE: HP stock dropped 12 percent in the company's latest quarter, which ended Oct. 31. Shares started August at $47.56 and ended October at $42.04.