By Nathalie Tadena
Hewlett-Packard Co. (HPQ) swung to a fiscal third-quarter profit
as a hefty write-down weighed on its year-earlier results, and the
technology company also reported a drop in revenue and unveiled a
handful of executive changes.
Shares fell 2.5% to $24.75 after-hours Wednesday as revenue fell
short of analyst expectations.
H-P said Chief Operating Officer Bill Veghte will become the
executive vice president and general manager of the enterprise
group. There are currently no plans to select a new COO after Mr.
Veghte transitions to the new role.
Dave Donatelli, who had lead the enterprise group, will take on
a new role focused on identifying early-stage technologies.
H-P also said it will combine its marketing and communications
organizations under Chief Communications Officer Henry Gomez.
Current Chief Marketing Officer Marty Homlish will take on the new
role of chief customer experience officer.
The company said the changes, which are effective immediately,
will help accelerate its turnaround.
The moves are the latest in a series of management shake-ups. In
June, H-P reassigned the head of its printing and PC businesses,
Todd Bradley, to a new role as executive vice president of
strategic growth initiatives.
H-P continues to attempt a multiyear turnaround as the PC
industry faces growing pressure from mobile devices and a weak
market for printers and servers. Rival Dell Inc. (DELL) last week
reported its fiscal second-quarter earnings declined 72% as the
computer maker recorded essentially flat revenue and an increase in
operating expenses.
With three CEOs since 2010, H-P has experienced heavy executive
turnover and pursued several different strategies. Last year, the
company unveiled a sweeping reorganization plan to fold its
once-dominant printing business into its PC-making personal-systems
group and centralize many other functions.
"I remain confident that we are making progress in our
turnaround," Chief Executive Meg Whitman said Wednesday.
For the period ended July 31, H-P reported a profit of $1.39
billion, or 71 cents a share, compared with a year-earlier loss of
$8.86 billion, or $4.49 a share. The year-ago period included an $8
billion write-down related to its 2008 acquisition of Electronic
Data Systems. Excluding impairment, restructuring charges and other
special items, fell to 86 cents from $1 a share.
In May, the company forecast earnings of 84 cents to 87 cents a
share, above analyst expectations at the time.
Revenue fell 8.2% to $27.23 billion. Analysts polled by Thomson
Reuters most recently projected revenue of $27.29 billion. The
latest quarter marks H-P's eighth-straight quarter of declining
sales.
H-P said revenue from its personal-systems unit fell 11% as
commercial revenue slipped 3% and consumer revenue declined 22%.
Total unit shipments were down 8%.
Printing revenue fell 3.6%. Revenue from the enterprise group,
which sells and maintains servers and other hardware, slid 9.4%.
Revenue from enterprise services, which sells corporate-technology
consulting, computer security and other corporate-tech services,
fell 8.7%. Software revenue, meanwhile, edged up 0.9%.
Total costs and expenses fell 34%. The year-ago period included
$1.8 billion in restructuring charges.
The PC maker narrowed its full-year adjusted earnings view to a
range of $3.53 to $3.57 a share. Its prior outlook called for
earnings of $3.50 to $3.60 a share.
Through Wednesday's close, H-P's stock is up 78% since the start
of the year.
Write to Nathalie Tadena at nathalie.tadena@wsj.com
Order free Annual Report for Hewlett-Packard Co.
Visit http://djnweurope.ar.wilink.com/?ticker=US4282361033 or
call +44 (0)208 391 6028
Subscribe to WSJ: http://online.wsj.com?mod=djnwires