Scandal-shaken Hewlett Packard (HPQ) reported solid earnings results not long after company CEO Mark Hurd resigned following an sexually tinged expenses imbroglio. The company's results weren't a surprise because it preannounced after Hurd's departure. HP shares were essentially unchanged after hours on a generally gloomy day for Wall Street.
HP reported net revenue of $30.7 billion, up 11.4% from a year earlier, slightly higher than $30.4 billion consensus expected by Wall Street analysts polled by Thompson Reuters. The company reported net earnings of $2.6 billion, or $1.08 per share, exactly in line with expectations.
"It's no surprise because they preannounced," Paul Link an equity analyst at Capstone Investments told CNBC. Referring to HP rival Dell (DELL), which also reported earnings Thursday, Link said, "This isn't an apples-to-apples comparison. HP is a major-league company, and Dell is a company that's in the middle of a turnaround."
In a statement, Cathie Lesjak, HP's CFO and interim CEO, sought to keep the focus away from Hurd and on HP's solid performance.
"The broad-based strength of HP's Q3 performance further demonstrates the power of our strategy and the discipline of our execution," Lesjak said. "We raised our full-year outlook and are continuing to build momentum in driving out costs, investing for profitable growth and capitalizing on HP's competitive advantages in the marketplace."
For the final quarter of 2010, HP said it would see sales of approximately $32.5 billion to $32.7 billion, higher than analysts had been projecting.
Life After Hurd
HP continues to show solid performance, but the company's shares have fallen about 15% since Hurd announced his resignation nearly two weeks ago. Hurd walked away with nearly $40 million in severance.
Hurd was often credited with reviving HP -- perhaps the most legendary Silicon Valley tech firm -- after Carly Fiorina's tumultuous tenure as CEO. Hurd cut costs, streamlined the company's vision and operations, and helped it move beyond an ugly scandal in which HP was caught spying on board members and reporters in an ill-conceived effort to ferret out corporate leaks.
But Hurd, a Wall Street favorite, was forced to resign after Jodie Fisher, an outside marketing contractor, accused him of sexual harassment. HP said Hurd hadn't violated the company's sexual harassment policies, but it concluded that he had filed inaccurate expense reports. Fisher has since said she lost work from HP because she wouldn't have sex with Hurd.
Earlier this week, Jayson Noland, an analyst at Robert W. Baird & Co., told DailyFinance that Todd Bradley, executive VP of HP's personal systems group is the odds-on favorite to replace Hurd. Bradley served as Palm CEO from 2003 to 2005 before joining HP and is credited with engineering HP's $1.2 acquisition of Palm. HP has hired executive-search firm Spencer Stuart to handle all activities involved in finding a new CEO.
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