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.
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