HP Announces Strong Results, But No Hurd Replacement
The company pushes sales and R&D plans as it continues to wrestle with its ex-CEO’s sudden departure
HP announced strong results for the third fiscal quarter of 2010, even as the company wrestled with the sudden departure of former chief executive Mark Hurd.
Those results included net revenues of $30.7bn, up 11.4 percent from the same quarter in 2009. Its Services, Enterprise Storage and Servers, HP Software, Personal Systems Group, and Imaging and Printing Group all experienced year-over-year increases in revenue. Overall, the company’s operating profit totalled $2.3bn.
HP chief executive Mark Hurd resigned on 6 August, touching off speculation around the circumstances of his fall and the company’s short-term future. Until a permanent replacement is named, HP chief finance officer Cathie Lesjak will serve as interim chief executive.
Sexual-harassment claims
Hurd’s resignation came in the wake of an internal investigation into sexual harassment claims by a former HP contractor, Jodie Fisher. While HP executives said they found no evidence of harassment, Hurd had apparently violated company business policies in order to disguise a personal relationship with Fisher – specifically, through actions such as filing false expense reports.
Unsurprisingly, HP executives chose to focus on the company’s metrics and revenues during the 19 August earnings call.
“As our results demonstrate, we continue to leverage our scale and reach,” Lesjak said during the call. HP apparently plans to increase its spending on both research and development, and enterprise sales force, in order to preserve that momentum.
HP’s $1.2bn acquisition of Palm closed at the beginning of July; it is widely expected that the company will install the Palm webOS as the operating system for an upcoming series of mobile products, including tablet PCs and smartphones.
Enterprise sales up
HP also saw increased enterprise sales, suggesting that businesses are beginning to spend on IT infrastructure after several quarters of recession-related belt-tightening. That strength in the commercial markets, HP executives insisted during the call, balanced out some lack of demand for the consumer notebook market. Strength also apparently came from HP’s networking business.
In addition, Lesjak hit back at recent rumours that Hurd had underinvested in the company’s research and development.
“We have not underinvested in R&D,” she told analysts and media. “What I think is important is, we have three-year plans out there that are supported by the board that include acceleration in R&D and sales, and those investments are funded through productivity initiatives.”
Executives on the call alluded to future products running both the Palm webOS and Windows, but offered no further details.
