HP Raises Outlook for 2011By Reuters | Posted 2010-11-23 Email Print
HP reported strong computer, server and storage sales and raised its fiscal 2011 forecasts, shrugging off concerns about government spending cuts that have hurt rival Cisco.
SAN FRANCISCO, Nov 22 (Reuters) - Hewlett-Packard Co (NYSE:HPQ) raised fiscal 2011 results forecasts and a solid debut by new CEO Leo Apotheker calmed investors nervous about his vision, sending the technology company's shares up 3 percent.
Strong commercial computer, server and storage sales spurred better-than-expected quarterly results for HP, easing fears that the No. 1 technology company by sales was distracted by internal turmoil. Former chief Mark Hurd departed in August after accusations of sexual harassment.
HP, the world's No. 1 PC maker, shrugged off the government spending cuts that have plagued Cisco Systems Inc. (NASDAQ:CSCO).
Apotheker, who took over Nov. 1, reassured Wall Street by sounding a predictably confident note on HP's prospects.
"He was solid. He did exactly what he needed to do," said Gleacher & Co analyst Brian Marshall. "Coupled with the strong financial performance, it made for a good quarter."
Apotheker joked he may have set a world record for travel the past few weeks as he jetted around the globe to familiarize himself with HP's sprawling business.
He provided few details about his startegy to deal with cutthroat competition in a consolidating technology sector. He did reaffirm that central themes will be software, now 3 percent of HP's business, and research spending.
"I am particularly committed to continue our focus on operational efficiency. However, you need to invest to create sustainable operating leverage. We need to do this on a continuing basis," he said.
Under Hurd, HP became known for cost control rather than investment. Analysts said Apotheker must restore stability and poise after a tumultuous four months that saw Hurd's departure and a nasty spat with one-time partner Oracle Corp (NASDAQ:ORCL).
Apotheker stuck close to his script on a conference call with analysts. The German executive highlighted HP's strengths and opportunities and said he needed time to learn the company's ins and outs. He had little to say about the Oracle row other than to label it a distraction.