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August 20, 2010 12:44 am
“When you have a winning strategy, I don’t see the motivation to change it,” said Cathie Lesjak, chief financial officer and acting chief executive.
Ms Lesjak said that she had spent the days since Mr Hurd’s sudden departure on August 6 speaking to employees, customers and investors and that HP had hired executive-search firm Spencer Stuart Wednesday to keep top officers from being distracted by the succession issue.
“They’re focused on doing their job so that we can focus on doing ours,” said Ms Lesjak, who is not a candidate for the top spot.
Ms Lesjak said the company’s acquisitions – from the purchase of Compaq, which made HP the top personal computer maker in 2002 – to the more recent buy-outs EDS, 3Com and Palm, were all “conscious decisions” to extend the company’s reach beyond its traditional strengths in business computers and printers.
Ms Lesjak’s upbeat comments were aimed at shoring up faith in a company whipsawed by the forced resignation of Mr Hurd, who slashed spending in much of the group to increase profit margins and the stock price.
HP’s market value has dropped by 10 per cent since Mr Hurd left and the company’s board reported that it had found judgment failures and improper expense-reporting that concealed a personal relationship between Mr Hurd and HP marketing contractor Jodie Fisher.
Ms Lesjak’s argument was helped by a strong third-quarter showing that the company had pre-announced. It said revenue increased 17 per cent at the PC division and 9 per cent at the printing unit.
The average selling price of PCs rose 5 per cent, in spite of weakness in consumer notebooks, and helped widen operating profit margin at that division to 4.7 per cent.
Total revenue rose 11.7 per cent to $30.7bn from a weak quarter the previous year, driving net income up 6.1 per cent to $1.77bn, or 75 cents a share, well above Wall Street estimates.
Services continued a lacklustre performance, with revenue up just 1 per cent. Executives said that the arm was helping performance in other ways, as the amount of hardware attached to service deals increased 50 per cent in the quarter.
HP said it saw none of the problems with overall tech spending cited by Cisco Systems last week, saying that the quarter had progressed in a normal pattern and improved more than typical for the season.
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