New CEO Nowhere to be Seen
SAN FRANCISCO, Sept 28 (Reuters) - Hewlett-Packard Co (HPQ.N), facing questions about its growth strategy after the surprise departure of ex-CEO Mark Hurd, on Tuesday forecast 2011 results that surpassed Wall Street expectations and propped up its shares.
The world's largest technology company forecast 12-14 percent growth in non-GAAP earnings in fiscal 2011 and revenue growth of 5-7 percent, helping its shares gain more than 1 percent in after-hours trade.
But the company has not announced who will take the helm, despite hopes among some investors it would do so at its annual analyst meeting on Tuesday.
In the leadership vacuum that ensued following Hurd's controversial ouster, shareholders have grumbled about HP's spending on acquisitions, and worried about newly aggressive rivals such as International Business Machines Corp (IBM.N) to Oracle (NASDAQ:ORCL).
On Tuesday, interim CEO Cathie Lesjak defended the company's innovation strategy. IBM CEO Sam Palmisano this month blasted HP for having focused too much on shaving costs and not spending enough on research and development to drive growth.
"Innovation has, is, and will continue to be at the core of Hewlett-Packard," Lesjak told analysts.
The company forecast earnings, excluding items, for fiscal 2011 to rise to $5.05 to $5.15 a share on revenue of $131.5 billion to $133.5 billion.
Wall Street is targeting earnings of $4.99 a share on revenue of $131.4 billion for the next fiscal year, according to Thomson Reuters I/B/E/S.
HP, which rakes in about as much revenue annually as Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) combined, is now on the prowl for a new chief, and is reportedly searching among its own ranks.
Its shares have fallen about 10 percent since Hurd's departure on Aug. 6. The company now trades at just over 9 times forward earnings, a discount to peers such as IBM and Cisco Systems (NASDAQ:CSCO).
Shares of HP (NYSE:HPQ) closed at $41.63 on the New York Stock Exchange and rose 1.3 percent to $42.19 in extended trading.
But investors would like to see someone steering the ship soon. A dominant force in PCs, printers, servers and services, HP now confronts a changing IT landscape dominated by a small number of behemoths all fighting for a slice of tech spending. New rivals have swelled the ranks of traditional foes like IBM and Dell (NASDAQ:DELL).
Hurd helped overhaul HP by slashing costs and boosting efficiency, but investors are pressing for new growth initiatives. That is expected to come primarily from HP's enterprise business.
Acquisitions are key, and HP went on a spending spree in the past month. It outlasted Dell in an expensive bidding war for data storage company 3PAR Inc, and also agreed to purchase to security software company ArcSight Inc.
Those acquisitions came on the heels of deals for networking equipment maker 3Com and smartphone maker Palm. Some on Wall Street have wondered how HP plans to digest all of it.
Several executives said to be competing for the top job will address analysts on Tuesday, including personal systems group head Todd Bradley and enterprise division chief Ann Livermore. (Reporting by Gabriel Madway; Editing by Edwin Chan, Bernard Orr)