July 8, 2020

Hewlett-Packard Board Meets on Replacing C.E.O.

The leading candidate was Meg Whitman, the former chief executive of eBay, who was sought for her ability to run a large technology company, they said.

The surprise move revealed not only the confusion inside the company over its strategy, but also the directors’ difficulties in choosing the leadership of the company.

The directors hired Mr. Apotheker, who had earlier been fired as a co-chief executive of SAP, a major business software maker, to replace Mark V. Hurd, whom the board had fired over what it characterized as discrepancies in his expense reporting. Mr. Hurd is now the co-president of Oracle, a rival to H.P.

Ms. Whitman, who ran eBay as it grew from a start-up to a major online retailer, left the company just as growth began to stall. She unsuccessfully ran for governor of California and was hired in March by Kleiner Perkins Caufield Byers, a venture capital firm, as a strategic adviser.

Hewlett-Packard’s stock was up 11 percent in afternoon trading in New York.

Article source: http://www.nytimes.com/2011/09/22/technology/hewlett-packard-board-meets-on-replacing-ceo.html?partner=rss&emc=rss

H.P. Weighs Spinning Off Its PC Unit

By acquiring Autonomy, based in Britain, Mr. Apotheker would sharply refocus the company on business services and products. He has been trying to speed the company’s growth, which has stagnated amid internal missteps, a sour economy and shifting consumer tastes.

Mr. Apotheker’s plan includes killing off the TouchPad tablet, introduced into stores only weeks ago, Pre smartphones and other WebOS products it acquired last year when it bought Palm for $1.2 billion. A spinoff of the PC unit would also reverse H.P.’s $25 billion acquisition of Compaq in 2002.

“It’s Day 1 of the transformation,” Mr. Apotheker said in an interview. He spoke of the “difficult decisions” that had to be made, but said he was seeking better performance from the company.

Splitting off the PC unit would eliminate the drag of a slumping, low-margin business on H.P. Instead, Mr. Apotheker, who joined H.P. last year, is trying to move toward providing corporate customers with more services and cloud computing — a term used to describe delivering products and services online — that he says is more “high value.”

The strategy challenges I.B.M and Oracle, two giants in the market. By unloading its computer business, H.P.’s would follow in the footsteps of  I.B.M., which sold its computer unit to Lenovo, a Chinese company, in 2005.

H.P. said it would take 12 to 18 months to decide what to do with the PC unit. Meanwhile, it will continue to run the business as usual. Mr. Apotheker said the company did not intend to dispose of its printer business.

“Enterprise is where the growth is, that’s where the margins are,” said Brian Marshall, an analyst with Gleacher Company.

Wall Street has been concerned about H.P.’s growth ever since Mr. Apotheker joined the company, and the weakening economy has added to the uncertainty. A series of disappointing quarters and forecasts had sent the company’s shares down nearly 22 percent since the start of the year before Thursday.

Shares of H.P. fell $1.88, or 6 percent, to close at $29.51.

Acquiring Autonomy, which makes software that searches and keeps track of corporate and government data, would greatly enhance H.P.’s shift to software and business services. The company has become one of the biggest technology firms in Britain and counts BP, Ford Motor and the United States Defense Department among its customers.

Autonomy would be H.P.’s third-largest acquisition ever, after Compaq and Electronic Data Systems. The $10 billion offer for Autonomy would represent a rich 64 percent premium over its market value. It produced almost $1 billion in revenue in the 12 months that ended June 30.

Mr. Apotheker said that Autonomy would get access to H.P.’s huge customer base. Its products would be sold across H.P. business, he said.

That also was H.P.’s strategy in buying Compaq. It gave the company the scale to cut costs and secure favorable prices on parts. It was also supposed to give it clout with corporations that were also seeking printers, servers, storage and data management services.

As recently as February, Todd Bradley, H.P.’s executive vice president for the company’s computer division, insisted in an interview that the PC was still a valuable part of H.P.’s business. He dismissed speculation that the company would dump the unit. “The PC business has been strategically important to H.P,” he said. “The strategic importance hasn’t changed as the leadership changes.”

H.P. has dominated the PC business, but in recent months the industry has gone through a downward turn with the shift from desktops and laptops to tablets. 

Contributing reporting were Evelyn Rusli, Michael J. de la Merced and Jeffrey Cane from New York, and Julia Werdigier from London.

Article source: http://feeds.nytimes.com/click.phdo?i=b63ab267e795bf8ade4fd2d198d7b96d

H.P. Profit Up 5%, but PC Sales Are Declining

SAN FRANCISCO — Hewlett-Packard reported Tuesday that sluggish sales of personal computers muted its earnings and it predicted that future growth would be dampened.

The company reported net income in the second quarter that ended April 30 rose 5 percent to $2.3 billion, or $1.05 cents a share, from $2.2 billion, or 91 cents, in the year-ago quarter.

The company said revenue climbed 3 percent, to $31.6 billion

The adjusted income of $1.24 a share was slightly above the expectations of Wall Street analysts. They had expected $1.21 a share and revenue of $31.54 billion, according to a survey of analysts by Thomson Reuters.

But the company also revised its forecast for the current quarter, indicating worries about the impact of the Japan earthquake, continued softness in sales of personal computers and lower operating profits in its services unit.

Revenue during the current quarter is expected to be around $31.1 billion to $31.3 billion, slightly below analyst expectations of $31.8 billion. Adjusted income is expected to be around $1.08 per share, which was also below the $1.24 that had been predicted.

Full-year revenue is expected to be $129 billion to $130 billion with adjusted income of at least $5 per share, also below analyst predictions. 

The company, based in Palo Alto, Calif., said that sales of personal computers fell 5 percent to $9.4 billion. Revenue for the unit that includes printers rose 5 percent to $6.7 billion.

Meanwhile, H.P.’s services business, which caters to corporate clients, gained 2 percent to $9 billion. Storage and servers increased 15 percent to $5.6 billion.

H.P. reported earnings a day earlier than originally planned after an internal memo from its chief executive, Léo Apotheker, warning of “another tough quarter” leaked to the press. His comments immediately cast doubt about the company’s growth and sent its shares spiraling.

They fell 4.5 percent to $38 in after-hours trading on Monday.

The memo, first reported by Bloomberg News, also alluded to potential layoffs and other cost-cutting measures.

Nevertheless, Mr. Apotheker said in a news release Tuesday that, “H.P. executed well and delivered a solid quarter.” He also said: “Our enterprise strategy, with services at its core, is focused on higher value-added solutions. Today we are accelerating our efforts to align our services business model to our long-term strategy to deliver unprecedented value to our customers and a better return for our shareholders.”

Companies like H.P. that make personal computers are vulnerable to changes in consumer spending because of the economy. Moreover, shoppers are increasingly buying tablet computers, a market in which Hewlett-Packard is bit player to Apple’s iPad. The company has said it expects to sell a tablet computer this summer.

In March, Mr. Apotheker outlined a plan to grow H.P.’s tiny corporate software business and expand into the cloud — a term used to describe products and services delivered online. However, that strategy, which puts the company on a collision course with I.B.M and Oracle, will take some time to get rolling.

Software sales grew 17 percent to $764 million in the quarter.

Article source: http://www.nytimes.com/2011/05/18/technology/18hewlett.html?partner=rss&emc=rss