HP Beats Street Projections, Whitman Promises 'No More Surprises'

By Chris Preimesberger  |  Posted 2011-11-21 Print this article Print

The new CEO acknowledges that the company had been "inconsistent" in its performance and that there would be "no more surprises" in its dealing with the press and shareholders.

Hewlett-Packard's new CEO, Meg Whitman-as well as the company's embattled board of directors, 324,000 employees and shareholders-breathed easier Nov. 21 after the company turned in a fourth-quarter 2011 earnings report that outperformed Wall Street analysts' projections.

The news bolstered the company's stock price early in the day by 4 to 6 percent, but ultimately the price closed down 4 percent, or $1.13, at $26.86.

The world's largest IT provider reported overall Q4 revenue of $32.12 billion, which worked out to 12 cents per share. If not for the dissolution of the Palm hardware business last summer, earnings per share would have been $1.17. A consensus of Wall Street analysts had projected EPS of $1.13 on revenue of $32.05 billion.

Although HP's earnings beat expectations, it wasn't by much. Revenue rose a mere 1 percent over Q4 2010 and technically was down 1 percent, if one excludes favorable foreign-exchange rates.

HP's consumer businesses (PCs, printers and other devices) were down an aggregate 9 percent, largely due to a 10 percent drop in imaging and printing revenue, which brought in $6.3 billion.

The Houston-based Personal Systems Group, which former CEO Leo Apotheker had announced in August that HP would either sell or spin out before Whitman reversed that last month, was down 2 percent from last year to $10.2 billion.

HP's enterprise business, in which Whitman has said the company will focus more of its research and development in 2012, was down 4 percent to $5.7 billion.

On the earnings teleconference, Whitman and CFO Cathy Lesjack referred often to "macroeconomic headwinds" as large part of HP's 2011 problems. But Whitman acknowledged that the company had been "inconsistent" in its performance and that there would be "no more surprises" in its dealing with the press and shareholders.

'Simpler, Clearer, More Consistent'

"I know we didn't live up to our expectations in 2011," Whitman said. "We need to be simpler, clearer and more consistent. No more surprises."

Whitman also said that, despite the abrupt changeover in CEOs and mixed corporate messages about its strategic planning, HP accomplished what she said were her three short-term priorities: exceeding Q4 expectations, deciding to retain or remove the PC business, and integrating Autonomy.

The $10.3 billion purchase of U.K.-based Autonomy, which provides a number of business software products and services, closed Oct. 3.


Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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