infoTECH Feature

September 29, 2010

HP Paints Rosy Financial Outlook to Analysts But No Hints on ID of Next CEO

Hewlett-Packard (News - Alert) Co. gave a rosy financial outlook to a meeting of analysts Tuesday without giving any hints on the identity of its next CEO, according to a report from the Associated Press (News - Alert).

H-P, the largest maker of personal computers and printers, has been without a permanent CEO since Mark Hurd was pressured to step down after a scandal surfaced stemming from allegations of sexual harassment and deceptive expense reports.

Hurd is now is the co-president of Oracle (News - Alert), an H-P rival.

The message coming from current top H-P executives is that the company will prosper no matter who is CEO, according to The AP.

“H-P has an extraordinary opportunity ahead of us to grow,” said Cathie Lesjak, the Palo Alto, Calif., company’s CFO and interim CEO, told the analysts’ meeting, according to The Wall Street Journal.

Lesjak said that HP's per-share earnings for its fiscal year ending in October 2011 will range from $5.05 to $5.15, excluding certain accounting items related to its recent acquisition spree, according to The AP. That would be up by as much as 14 percent from this year and ahead of the average estimate of $4.99 per share among analysts polled by Thomson Reuters (News - Alert), The AP added.

Next year's revenue is expected to total $131.5 billion to $133.5 billion, an increase of 5 percent to 7 percent, The AP reported.

The latest projections reflect HP’s confidence that it can boost profit margins as it expands into consulting services, computer security and storage while maintaining its lead in PCs and printers, according to The AP.

The company also expects to keep increasing market share through acquisitions, having already spent about $31 billion buying 35 companies during the past four years, The AP reports.

The company anticipates a "robust" recovery in its stock price next year, Lesjak was quoted by The AP as saying.

In addition, The AP reported some of Hurd’s possible replacements include: Todd Bradley, who oversees HP's personal computer division; Ann Livermore, who runs the company's rapidly expanding technology services; and Vyomesh "VJ" Joshi, who steers HP's highly profitable printer-ink operations.

Another internal candidate for the CEO spot is Dave Donatelli, a relatively recent hire who helped to lead H-P's successful bidding war for 3PAR Inc, according to The Wall Street Journal.

H-P has approached a number of potential external candidates for the CEO spot, including: Stephen Elop, the former Microsoft (News - Alert) Corp. executive who recently was named CEO of Nokia Corp., The Journal reported.

Company observers say Bradley is the front-runner if H-P names a CEO from its own ranks.

Lesjak said HP has been considering CEO candidates from both inside and outside the company.

There is no indication when the board might announce the identity of the next CEO.

Ed Silverstein is a contributing editor for TMCnet's InfoTech Spotlight. To read more of his articles, please visit his columnist page.

Edited by Stefania Viscusi

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