CEO Promises 'No More Surprises' as HP Beats Street Projections
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.
"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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